Agrarian Cases

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THIRD DIVISION
LAND
BANK
THEPHILIPPINES,
Petitioner,
OF
- versus
KUMASSIE
PLANTATION
COMPANY INCORPORATED,
Respondent.
G.R. No. 177404
x-----------------------------------x
KUMASSIE
PLANTATION
COMPANY INCORPORATED,
Petitioner,
G.R. No. 178097

Present:
YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
- versus -
LAND
BANK
OF
THEPHILIPPINES and
THE
SECRETARY
OF
THE
DEPARTMENT OF AGRARIAN
Promulgated:
REFORM,
Respondents.
June 25, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
Before Us are two consolidated Petitions for Review on Certiorari under

Rule 45 of the Rules of Court,[1] docketed as G.R. No. 177404 and G.R. No.
178097, assailing the Decision,[2] dated 24 November 2005, and Resolution,
[3]
dated 30 March 2007, of the Court of Appeals in CA-G.R. CV No. 65923.
The undisputed facts are as follows:
Kumassie Plantation Company Incorporated (KPCI) is the registered owner
of 802.2906 hectares of agricultural land situated in Basiawan, Santa Maria, Davao
del Sur, and covered by Transfer Certificate of Title (TCT) No. 646.[4] In 1982,
KPCI and Philippine Cocoa Corporation (PCC) entered into a contract of lease
whereby the former agreed to lease the said land together with the improvements
thereon to the latter for a period of 25 years beginning 15 May 1982.
[5]
Subsequently, PCC executed a deed of assignment transferring all its rights as

lessee under the said contract of lease to Philippine Cocoa Estates Corporation
(PCEC) effective 31 December 1983.[6]
On 18 February 1992, a portion of the aforementioned land, measuring
457.9952 hectares, planted with coconuts and cocoa (subject land), was
compulsorily acquired by the Department of Agrarian Reform (DAR), Region XI,
Davao City, for distribution to farmer-beneficiaries pursuant to Republic Act No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988.
[7]
The DAR then requested the Land Bank of the Philippines (LBP) to determine
the value of the subject land.[8] LBP pegged the value of the subject land
at P19,140,965.00 or equivalent to P41,792.94 per hectare.[9] DAR offered to
KPCI said amount as compensation for the subject land, [10] but it was rejected by
KPCI for being unreasonably low.[11] Despite the rejection by KPCI of the
valuation of the subject land by LBP, the amount of P19,140,965.00 was deposited
by LBP, upon the instructions of DAR, in the name and for the account of KPCI.
[12]
KPCI withdrew from LBP the entire amount in cash and bonds.[13]
DAR then advised the Department of Agrarian Reform Adjudication Board
(DARAB), on 27 July 1994, to conduct a summary administrative proceeding for
the determination of the just compensation due KPCI for the subject land. [14] The
proceeding was docketed as DARAB Case No. JC-R-XI-DAV-OR-0017-CO. LBP
and KPCI later submitted their respective position papers with the DARAB.[15]
DAR next directed the Register of Deeds of Digos, Davao del Sur, on 26
September 1994, to cancel TCT No. 646 covering the subject land in the name of
KPCI and to issue a new TCT in the name of the Republic of the Philippines.
[16]
After the issuance of a new TCT in the name of the Republic of the Philippines,
and again upon the request of the DAR, the Register of Deeds of Digos, Davao del
Sur, issued Certificates of Land Ownership Award (CLOAs) to qualified farmerbeneficiaries.[17]
On 20 January 1997, KPCI filed with the Davao City Regional Trial Court
(RTC), Branch 15 (acting as a Special Agrarian Court), a Complaint against LBP
and the DAR for determination and payment of just compensation, docketed as
Civil Case No. 25,045-97.[18] KPCI implored the RTC to render judgment fixing
the just compensation for the subject land at P160,000.00 per hectare, or equivalent
to a total amount of P73,279,232.00, less the amount of P19,140,965.00 which
KPCI had previously withdrawn from LBP.[19]
Subsequently, LBP and the DAR filed with the RTC their respective
Answers contending that the Complaint was prematurely filed as KPCI failed to
exhaust administrative remedies; that KPCI was already paid just compensation for
the subject land, determined to be P41,792.94 per hectare, for a total amount
of P19,140,965.91; and that KPCI admitted in the Complaint having received such
amount from LBP. LBP asserted that it correctly calculated the value of the subject
land to be P19,140,965.91, applying the formula prescribed in DAR Administrative
Order (DAO) No. 6, Series of 1992, as amended by DAO No. 11, Series of
1994. At the end of their respective Answers, both LBP and DAR sought the
dismissal of the Complaint of KPCI.[20]
The RTC thereafter directed the parties to submit the names of their
respective nominees for commissioners in Civil Case No. 25,045-97. [21] KPCI
nominated Oliver A. Morales (Morales), President of Cuervo Appraisers
Incorporated,[22] while LBP submitted the name of a certain Engineer Romeo
Cabanial.[23] For its part, the DAR endorsed Tomasa L. Miranda (Miranda), a DAR
employee.[24] The RTC appointed Morales and Miranda as commissioners. The
two subsequently took their oaths of office as court-appointed commissioners.[25]
Meanwhile, the DARAB issued, on 19 May 1997, a Resolution in JC-R-XIDAV-OR-0017-CO, affirming the valuation of the subject land by the LBP.[26] The
DARAB found the LBP valuation of the subject land to be accurate and just, as it
was in harmony with the pertinent provisions of Republic Act No. 6657 and DAO
No. 6, Series of 1992, as amended.[27]
After trial in Civil Case No. 25,045-97, the RTC rendered its Decision on 18
February 1999, fixing the fair and reasonable value of the subject land
at P100,000.00 per hectare. In arriving at said valuation, the RTC considered the
location of the subject land, the nature of the trees planted thereon, and the reasons
stated in Morales appraisal report. The RTC then ordered LBP and DAR to pay
KPCI an amount equivalent to P100,000.00 per hectare as just compensation for
the subject land, plus legal interest computed from 23 March 1994 until fully paid.
[28]
LBP filed with the RTC a Motion for Reconsideration of the foregoing
Decision;[29] while DAR filed a Notice of Appeal, manifesting that it would appeal
said RTC Decision to the Court of Appeals.[30]
On 23 July 1999, the RTC issued an Order denying the Motion for
Reconsideration of LBP.[31] Aggrieved, LBP filed its appeal with the Court of
Appeals, docketed as CA-G.R CV No. 65923.[32] LBP filed, on 27 September
2000, its Appellants Brief in CA-G.R CV No. 65923. [33] DAR joined the appeal of
LBP by filing, on 18 January 2001, in CA-G.R CV No. 65923, a Manifestation
adopting in toto the Appellants Brief of LBP.[34]
On 24 November 2005, the Court of Appeals promulgated its Decision in
CA-G.R CV No. 65923, affirming with modification the appealed RTC Decision.
The appellate court sustained the finding of the RTC that the fair and reasonable
value of the subject land was P100,000.00 per hectare. Nevertheless, it ruled that
the imposition of legal interest should be deleted, as there was no delay on the part
of LBP in depositing the amount of P19,140,965.91 in the account of KPCI, which
amount was admittedly withdrawn by KPCI. The fallo of the Decision of the
Court of Appeals reads:
WHEREFORE, premises considered, the Decision of the Regional Trial
Court (RTC), 11th Judicial Region, Br. 15, Davao City is AFFIRMED with
MODIFICATION. As modified, as none should be awarded, the award of
interest is deleted. No costs.[35]
LBP and KPCI each filed its own Motion for Reconsideration of the 24
November 2005 Decision of the Court of Appeals,[36] but both Motions were denied
by the appellate court in its Resolution dated 30 March 2007.
Hence, LBP and KPCI separately sought recourse from this Court by virtue
of the Petitions for Review presently before us, docketed as G.R. No.
177404 and G.R. No. 178097, respectively. The two Petitions were consolidated
since they arose from the same set of facts.[37]
The procedure for the determination of compensation cases under Republic
Act No. 6657, as devised by this Court,[38] commences with the valuation by the
LBP of the lands taken by the State from private owners under the land reform
program. Based on the valuation of the land by the LBP, the DAR makes an offer
to the landowner through a written notice. In case the landowner rejects the offer,
a summary administrative proceeding is held and, afterwards, depending on the
value of the land, the Provincial Agrarian Reform Adjudicator (PARAD), the
Regional Agrarian Reform Adjudicator (RARAD), or the DARAB, fixes the price
to be paid for the said land. If the landowner still does not agree with the price so
fixed, he may bring the matter to the RTC, acting as Special Agrarian Court.
In the process of determining the just compensation due to landowners, it is
a necessity that the RTC takes into account several factors enumerated in Section
17 of Republic Act No. 6657, as amended, to wit:
Sec. 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed by
the farmers and the farmworkers and by the Government to the property as well as
the non-payment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to determine
its valuation.
Being the government agency primarily charged with the implementation of

the agrarian reform program, DAR issued DAO No. 6, Series of 1992, as amended,
filling out the details necessary for the implementation of Section 17 of Republic
Act No. 6657. DAR translated the factors specified in Section 17 of Republic Act
No. 6657, into a basic formula, presented as follows in DAO No. 6, Series of 1992,
as amended:
LV = (CNI x 0.6) + ( CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present,
relevant, and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the
formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable,
the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable,
the formula shall be:
LV = MV x 2
In its Petition docketed as G.R. No. 177404, LBP maintains that the RTC
and the Court of Appeals erred in their valuation of the subject land at P100,000.00
per hectare because both courts did not consider the factors enumerated in Section
17 of Republic Act No. 6657 and the formula for valuation of lands under DAO
No. 6, Series of 1992, as amended.[39]
While the determination of just compensation is essentially a judicial

function which is vested in the RTC acting as Special Agrarian Court, we,
nonetheless, disregarded the determination of just compensation made by the RTC
in Land Bank of the Philippines v. Banal,[40] Land Bank of the Philippines v.
Celada,[41] and in Land Bank of the Philippines v. Lim,[42] when, as in this case, the
judge gravely abused his discretion by not taking into full consideration the factors
specifically identified by law and implementing rules.
In several cases, we have reminded the special agrarian courts to resolve just
determination cases judiciously and with utmost observance of Section 17 of
Republic Act No. 6657 and the administrative orders issued by the DAR to
implement said statutory provision.
In Land Bank of the Philippines v. Banal,[43] we emphasized that the factors
laid down in Section 17 of Republic Act No. 6657 and the formula stated in DAO
No. 6, Series of 1992, as amended, must be adhered to by the RTC in fixing the
valuation of lands subjected to agrarian reform, thus:
In determining just compensation, the RTC is required to consider several
factors enumerated in Section 17 of R.A. 6657, as amended, thus:
xxxx
These factors have been translated into a basic formula in [DAO 6-92], as
amended by [DAO 11-94], issued pursuant to the DARs rule-making power to
carry out the object and purposes of R.A. 6657, as amended.
xxxx
While the determination of just compensation involves the exercise of
judicial discretion, however, such discretion must be discharged within the bounds
of the law. Here, the RTC wantonly disregarded R.A. 6657, as amended, and its
implementing rules and regulations. ([DAO 6-92], as amended by [DAO 11-94]).
xxxx
WHEREFORE, x x x. The trial judge is directed to observe strictly the

procedures specified above in determining the proper valuation of the subject
property. (Emphasis ours.)
Again, in Land Bank of the Philippines v. Celada,[44] we stressed that the

special agrarian court cannot ignore, without violating Republic Act No. 6657, the
formula provided by the DAR for the determination of just compensation. We
rejected the valuation fixed by the RTC because it failed to follow the DAR
formula:
While [Special Agrarian Court] is required to consider the acquisition cost
of the land, the current value of like properties, its nature, actual use and income,
the sworn valuation by the owner, the tax declaration and the assessments made
by the government assessors to determine just compensation, it is equally true that
these factors have been translated into a basic formula by the DAR pursuant to its
rule-making power under Section 49 of R.A. No. 6657. As the government
agency principally tasked to implement the agrarian reform program, it is the
DARs duty to issue rules and regulations to carry out the object of the
law. [DAO] No. 5, s. of 1998 precisely filled in the details of Section 17, RA
No. 6657 by providing a basic formula by which the factors mentioned therein
may be taken into account. The [Special Agrarian Court] was at no liberty to
disregard the formula which was devised to implement the said provision.
It is elementary that rules and regulations issued by administrative bodies
to interpret the law which they are entrusted to enforce, have the force of law, and
are entitled to great respect. Administrative issuances partake of the nature of a
statute and have in their favor a presumption of legality. As such, courts cannot
ignore administrative issuances especially when, as in this case, its validity was
not put in issue. Unless an administrative order is declared invalid, courts have no
option but to apply the same. (Emphasis ours.)
Instead, we sustained the valuation made by the LBP, which was patterned
after the applicable administrative order issued by the DAR, viz:
[LBP] arrived at its valuation by using available factors culled from the
Department of Agriculture and Philippine Coconut Authority, and by computing
the same in accordance with the formula provided, thus
COMPUTATION (Applicable Formula): LV = 0.90 CNI + 0.10 MV
Comparable Land Transactions (P x x x
x ____ ) = P x-x-x
Capitalized Net Income: Cassava
16,666.67 x 0.90 = 15,000.00
Corn/Coco 26,571.70
Market Value
Cassava
per Tax Declaration:
Corn/Coco 10,053.93
= 23,914.53
8,963.78 x 0.10 = 896.38

= 1,005.39
Computed Value per

Hectare:
Cassava 15,896.38; Corn/Coco 24,919.92
xxxx
Value per hectare used: Cassava 15,896.38 x 6.0000 has. = 95,378.28
Corn/Coco 24,919.92 x 8.1939 has.= 204,191.33
Payment due to LO :
P299, 569.61
The above computation was explained by Antero M. Gablines, Chief of

the
Claims,
Processing,
Valuation
and
Payment
Division
of
the Agrarian Operations Center of the Land Bank, to wit:
ATTY. CABANGBANG: (On direct):
xxxx
q.
What are the items needed for the Land Bank to compute?
a.
In accordance with Administrative Order No. 5, series of 1998,

the value of the land should be computed using the capitalized
net income plus the market value. We need the gross
production of the land and its output and the net income of the
property.
q.
You said gross production. How would you fix the gross
production of the property?
a.
In that Administrative Order No. 5, if the owner of the land is

cooperative, he is required to submit the net income. Without
submitting all his sworn statements, we will get the data from the
DA (Agriculture) or from the coconut authorities.
xxxx
q.
In this recommended amount which you approved, how did you

arrive at this figure?
a.
We used the data from the Philippine (Coconut) Authority and the
Agriculture and the data stated that Cassava production was only
10,000 kilos per hectare; corn, 2,000 kilos; and coconuts, 15.38
kilos per hectare. The data stated that in the first cropping of 1986,
the price of cassava was P1.00 per kilo; corn was sold at P7.75 per
kilo; and the Philippine Coconut Authority stated that during that
time, the selling price of coconuts was P8.23 per kilo.
q.
After these Production data and selling price, there is here a cost
of operation, what is this?
a.
It is the expenses of the land owner or farmer. From day one of the
cultivation until production. Without the land owners submission
of the sworn statement of the income, production and the cost, x x
x Administrative Order No. 5 states that x x x we will use 20% as
the net income, meaning 80% of the production in peso. This is the
cost of valuation.
q.
80 % for what crops?
a.
All crops except for coconuts where the cost of expenses is only
20%.
q.
Summing all these data, what is the value per hectare of the
cassava?
a.
The cassava is P15,896.38.
q.
How about the corn x x x intercropped with coconuts?
a.
P24,919.92.
Under the circumstances, we find the explanation and computation of

[LBP] to be sufficient and in accordance with applicable laws. [LBPs]
valuation must thus be upheld.[45] (Emphases ours.)
In Apo Fruits Corporation v. Court of Appeals,[46] we once more gave

paramount importance to the criteria inscribed in Section 17 of Republic Act No.
6657 and the pertinent DAOs. In sustaining therein the valuation of the special
agrarian court, we ratiocinated:
[T]he Court affirmed the due consideration given by the RTC of the factors
specified in Section 17, Republic Act No. 6657. Again, the proper valuation of
the subject premises was reached with clear regard for the acquisition cost of the
land, current market value of the properties, its nature, actual use and
income, inter alia factors that are material and relevant in determining just
compensation.These are the very same factors laid down in a formula by DAR
A.O. No. 5. Due regard was thus given by the RTC to Republic Act No. 6657,
DAR A.O. No. 5 and prevailing jurisprudence when it arrived at the value of just
compensation due to AFC and HPI in this case.
The Court En Banc in Land Bank of the Philippines v. Lim[47] was confronted
with the question of whether the RTC can resort to any other means of determining
just compensation aside from Section 17 of Republic Act No. 6657 and DAO No.
6, Series of 1992, as amended. The Court resolved the issue in the negative and
pronounced that Section 17 of Republic Act No. 6657 and DAO No. 6, Series of
1992, as amended, are mandatory and are not mere guides that the RTC may
disregard. Citing Banal and Celada, we held in Lim that:
In Land Bank of the Philippines v. Spouses Banal [434 SCRA 543], this
Court underscored the mandatory nature of Section 17 of RA 6657 and DAR
AO 6-92, as amended by DAR AO 11-94, x x x.
xxxx
And in LBP v. Celada [479 SCRA 495], this Court set aside the valuation
fixed by the RTC of Tagbilaran, which was based solely on the valuation of
neighboring properties, because it did not apply the DAR valuation formula.
x x x.
xxxx
Consequently, as the amount of P2,232,868 adopted by the RTC in its
December 21, 2001 Order was not based on any of the mandatory formulas
prescribed in DAR AO 6-92, as amended by DAR AO 11-94, the Court of
Appeals erred when it affirmed the valuation adopted by the RTC. (Emphases
ours.)
In the instant case, the RTC did not pay particular attention to Section 17 of
Republic Act No. 6657 and DAO No. 6, Series of 1992, as amended. It merely
cited the location of the subject land, nature of the trees planted thereon, and
Morales appraisal report, as bases for fixing the value of the subject land
at P100,000.00 per hectare; which are not among the factors mentioned in Section
17 of Republic Act No. 6657. Also, the RTC did not apply the formula stated
under DAO No. 6, Series of 1992, as amended, in fixing the value of the subject
land. This undoubtedly constitutes an obvious departure from the settled doctrine
previously discussed herein regarding the mandatory nature of Section 17 of
Republic Act No. 6657 and DAO No. 6, Series of 1992, as amended.
Further, Morales, in his appraisal report, used the market data approach (a
method which based the value of the subject land on sales and listings of similar
properties situated within the area), and the income approach (a procedure which
based the value of the subject land on the potential net benefit that may be derived
from its ownership) in determining the value of the subject land. [48] Morales did
not explicitly state or even impliedly use Section 17 of Republic Act No. 6657 and
DAO No. 6, Series of 1992, as amended, in his appraisal report for the subject
land. Neither was there any foundation for concluding that the market data
approach and income approach conformed to statutory and regulatory
requirements. More importantly, Morales himself admitted during the trial that he
did not consider Republic Act No. 6657 and DAO No. 6, Series of 1992, as
amended, in his appraisal report for the subject land, despite being aware of the
said law and rules for a long time.[49] This being the case, the valuation of the
subject land, as contained in the appraisal report adopted by the RTC, cannot be
deemed to be in compliance with the requirements under Section 17 of Republic
Act No. 6657 and DAO No. 6, Series of 1992, as amended.
In contrast, LBP arrived at its valuation of the subject land by considering
the factors identified under Section 17 of Republic Act No. 6657, and by
computing the same in accordance with the formula in DAO No. 6, Series of 1992,
as amended. The meticulous calculations of LBP are reproduced below:
FORMULA USED IN THE VALUATION OF THE SUBJECT PROPERTY
The records show that Acquisition Cost (CA), Market Value based on
Mortgage (MVM) and Comparable Sales (CS) are not applicable. Hence,
pursuant to paragraph A.2 of DAR Adm. Order No. 6, Series of 1992, the
applicable formula in arriving at the land Value is: LV = (CNI x 0.9) + (MV [x]
0.1).
Considering that the subject property is covered by an existing lease
contract, the Lease Rental Income was also considered in the computation of the
Capitalized Net Income (CNI) by following the formula prescribed under
paragraph B.7 of Dar Adm. Order No. 6, Series of 1992, thus:
CNI = LRI
.12
DISCUSSION OF THE FORMULAE
The pertinent provisions of DAR Adm. Order No. 6, Series of 1992,
reads:
B.
Capitalized Net Income (CNI) This shall refer to the difference between
the gross sales (AGP x SP) and total cost of operations (CO) capitalized at
12%.
Expressed in equation form:
CNI = (AGP x SP) CO
.12
Where: CNI = Capitalized Net Income
AGP = One years Average Gross Production immediately preceding the
date of offer in case of VOS or date of notice of coverage in case
of CA.
SP = Selling price shall refer to average prices for the immediately
preceding calendar year from the date of receipt of the claimfolder
by LBP from DAR for processing secured from the Department of
Agriculture (DA) other appropriate regulatory bodies or in their
absence, from Bureau of Agricultural Statistics. If possible, SP
data shall be gathered from the barangay or municipality where the
property is located. In the absence thereof, SP may be secured
within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be obtained or not be obtained

or verified, and assumed net income rate (NIR) of 20% shall be
used. Landholdings planted to coconut which are productive at the time of
offer/coverage shall continue to use the 70% NIR x x x
12 =
Capitalized Rate
B.1
Industry data on production, cost of operation, and selling price
shall be obtained from government/private entities. Such entities shall
include, but not limited to the Department of Agriculture (DA), the Sugar
Regulatory Authority (SRA), the Philippine Coconut Authority (PCA) and
other private persons/entities knowledgeable to the concerned industry.
B.2
The landowner shall submit a statement of net income derived
from the land subject of acquisition. This shall include among others, total
production and cost of operations on a per crop basis, selling price/s (farm
gate) and such other data as may be required.
xxxx
In case of failure by the landowner to submit the statement x x x or the
data stated therein cannot be verified/validated from the farmers, LBP may
adopt any available industry data or in the absence thereof may conduct an
industry study on the specific crop which will be used in determining the
production, cost and net income of the subject landholding.
xxxx
B.7 For landholdings planted to permanent crops which are covered by
existing lease contract, the following formula shall be used in the
computation of the CNI:
CNI/Ha. = LRI
.12
Where:
LRI = Lease Rental Income per Hectare/Year as stipulated

under the contract.
xxxx
c.
In case the lease rental is a variable amount (e.g., progressively
increasing during the term of the lease), LRI is computed as follows:
Sum of Annual lease Rental per Hectare over
LRI = the remaining Term of the Lease Contract
Remaining Term of Lease, Years
xxxx
D.
Market Value per Tax Declaration (MV) shall refer to the market value per
Tax Declaration (TD) issued before August 29, 1987 (effectivity of EO
229). The most recent set of values indicated in the latest schedule of unit
value (SMV) grossed-up for inflation rate from the date of effectivity up to
the date of receipt of claimfolder by LBP from DAR for processing.
CAPITALIZED NET INCOME
Re: AGP
LANDBANK adopted as AGP the average production indicated in the
Contract of Lease which is 44 metric tons of copra per month (net) or 528 metric
tons a year. Converted into kilos, the AGP per hectare is 658.12 kilos.
Re: Selling Price
As Selling Price, LANDBANK used the 1992 Philippine Coconut
Authority Data which is P6.87 per kilo as the same is the average price for the
immediately preceding calendar year from the date of receipt by LANDBANK of
the claimfolder from DAR for processing in 1993 pursuant to paragraph 5, Item B
of DAR Adm. Order No. 6, Series of 1992, above quoted.
Re: Capitalization Rate
A 12% capitalization rate was used in accordance with paragraph 8, Item
B of DAR Adm. Order No. 6, Series of 1992.
Using the foregoing as input, the CNI for copra is P37,677.37 per hectare
(658.12 kilos x P6.87 per kilo / .12).
Cocoa was not included in the computation of the CNI because there is no
production data available. Further, the same was introduced by the lessee.
Re: LRI
Pursuant to Item B, paragraph B.7, sub-paragraph c of DAR Adm. Order
No. 6, Series of 1992, LANDBANK computed the total lease rentals for the
remaining period of the lease contract (1994 to 2007 or 14 years). Thus, LRI =
(690 x 4) + (P680 x 5) + (P1,120 x 5) divided by 14 or P904.29 per
hectare. Following the formula: 12% over LRI (P904.29), the CNI per hectare
(Lease Contract) is P7,535.75.
MARKET VALUE PER TAX DECLARATION
In the computation of the market Value per Tax Declaration (MV), the unit
market values of both the land and the coconut trees were determined based on
the 1991 Schedule of Market Values for agricultural properties in Sta. Maria,
Davao del Sur. Per the said Schedule of Market Values, the subject property is
classified as third class cocoland and has a unit market value of P6,240.00 per
hectare while the cocotrees have a unit market value of P62.40 per tree.
The unit market values of both the land and the cocotrees were multiplied
with the location adjustment factor of 98% and the results were in turn multiplied
with the Consumer Price Index (1.1254). Thus, the total market value as adjusted
for the land is P6,882.05 per hectare and P4,129.23 for the cocotrees or a total
of P11,011.28 per hectare.
In summation:
CNI (copra)
CNI (Lease contract)
Total CNI
P37,677.37 per ha.

P 7,535.75 per ha.
P45,213.12 per ha.
MV (Land)
MV (cocotree)
Total MV
P 6,882.05 per ha.

P 4,129.23 per ha.
P11,011.28 per ha.
Following the formula: LV = CNI x 0.9 (P45,213.12 x 0.9) P40,691.81 +

MV 0.1 (11,011.28 x 0.1) P1,101.13 x 457.9952 hectares, the total value of the
area subject to acquisition isP19,140,965.91.[50] (Emphases supplied).
We find the foregoing exhaustive explanation and thorough computations of

LBP to be sufficient and in accordance with Section 17 of Republic Act No. 6657
and DAO No. 6, Series of 1992, as amended. Hence, the Court affirms the
valuation by LBP of P41,792.94 per hectare, or a total of P19,140,965.91, for the
subject land.
Since we have already resolved the issue in G.R No. 177404, we shall now
discuss and determine the matters brought up in G.R. No. 178097.
In its Petition docketed as G.R. No. 178097, KPCI argues that the
imposition of legal interest as damages is warranted because LBP has delayed in
paying just compensation for the subject land. KPCI alleges that the act of LBP in
appealing the decisions of the RTC and the Court of Appeals reveals the intent of
the LBP to delay the payment of just compensation to KPCI.[51]
Given our finding that it is the valuation of the subject land by the LBP that
is correct and in compliance with the requirements of the law and administrative
rules and regulations, then the issue of interest, raised by KPCI in its Petition, has
actually become irrelevant. The amount of P19,140,965.91, representing the
valuation of LBP for the entire subject land, was deposited for the account of and
in the name of KPCI, which the latter had admittedly already withdrawn. The just
compensation for the subject land is, thus, already fully paid.
Even if we were still to address the issue of interest, we shall decide against
KPCI.
In expropriation cases, interest is due the landowner if there was delay in

payment. The imposition of interest was in the nature of damages for the delay in
payment, which in effect makes the obligation on the part of the government one of
forbearance. It follows that the interest in the form of damages cannot be applied
where there was prompt and valid payment of just compensation. [52] In Apo Fruits
Corporation v. Court of Appeals,[53] we stressed that interest on just compensation
is imposed only in case of delay in the payment thereof, which must be sufficiently
established.
There is nothing in the records to show that LBP was delayed in the payment
of just compensation to KPCI. In fact, contrary to the claim of KPCI, it was paid
just compensation by LBP with dispatch.
The mere fact that LBP appealed the decisions of the RTC and the Court of
Appeals does not mean that it deliberately delayed the payment of just
compensation to KPCI. LBP is an agency created primarily to provide financial
support in all phases of agrarian reform pursuant to Section 74 of Republic Act No.
3844 and Section 64 of Republic Act No. 6657. It is vested with the primary
responsibility and authority in the valuation and compensation of covered

landholdings to carry out the full implementation of the Agrarian Reform
Program. It may agree with the DAR and the landowner as to the amount of just
compensation to be paid to the latter and may also disagree with them and bring
the matter to court for judicial determination. [54] This makes the LBP an
indispensable party in cases involving just compensation for lands taken under the
Agrarian Reform Program, with a right to appeal decisions in such cases that are
unfavorable to it. Having only exercised its right to appeal in this case, LBP
cannot be penalized by making it pay for interest.
WHEREFORE, in view of the foregoing:
1) The Petition of Land Bank of the Philippines in G.R. No. 177404
is GRANTED. The Decision, dated 24 November 2005, and Resolution, dated 30
March 2007, of the Court of Appeals in CA-G.R. CV No. 65923, are REVERSED
and SET ASIDE. The valuation of the subject land at P41,792.94 per hectare, for
a total of P19,140,965.91, by the Land Bank of the Philippines is APPROVED,
and such amount is DECLARED PAID IN FULL; and
2) The Petition
is DENIED. No costs.
of
Kumassie
Plantation
Company
Incorporated
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
PRESBITERO J. VELASCO, JR.

Associate Justice
ANTONIO EDUARDO B. NACHURA

Associate Justice
DIOSDADO M. PERALTA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
Rollo (G.R. No. 177404), pp. 33-55 and (G.R. No. 178097) pp. 29-49.
Penned by Associate Justice Normandie B. Pizarro with Associate Justices Edgardo A. Camello and
Ricardo R. Rosario, concurring; CA rollo, pp. 81-90.
Id. at 241-243.
Records, pp. 12-14.
Id. at 246-254.
Id. at 255-259.
Id. at 20.
Id. at 22; Executive Order No. 405, dated 14 June 1990, vests the Land Bank of the Philippines the
primary responsibility to determine the land valuation and compensation for all private lands covered by
Republic Act No. 6657. SeePhilippine Veterans Bank v. Court of Appeals, 379 Phil. 141, 145 (2000).
Records, p. 15.
Id. at 20.
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
[28]
[29]
[30]
[31]
[32]
[33]
[34]
[35]
[36]
[37]
[38]
[39]
[40]
[41]
[42]
[43]
[44]
[45]
[46]
[47]
[48]
[49]
[50]
[51]
[52]
[53]
[54]
Id. at 21.
Id. at 22.
Id. at 6.
Pursuant to Section 16(d) of Republic Act No. 6657.
CA rollo, p. 188; rollo (G.R. No. 177404), pp. 107-113.
Records, p. 22.
Id. at 23.
Id. at 1-11.
Id.
Id. at 77-83 and 95-97.
Id. at 73.
Id. at 75.
Id. at 81.
Id. at 83.
Id. at 92-93.
Id. at 217-222.
Id.
Id. at 346-355; The RTC failed to state the total amount payable to KPCI as just compensation, but
considering its valuation of the subject land at P100,000.00 per hectare, and the total area of the subject
land which is 457.9552 hectares, then total just compensation would amount to P45,795,200.00. The RTC
likewise failed to mention subtracting from the total just compensation awarded the P19,149.965.91 already
received by KPCI.
Id. at 356-360.
Id. at 363.
Id. at 375.
CA rollo, pp. 16-33.
Id.
Id. at 73-74.
Id. at 90.
Rollo (G.R. No. 178097), p. 159.
Land Bank of the Philippines v. Banal, G.R. No. 143276, 20 July 2004, 434 SCRA 543, 550-551.
Rollo, (G.R. No. 177404), pp. 42-53.
Supra note 38.
G.R. No. 164876, 23 January 2006, 479 SCRA 495.
G.R. No. 171941, 2 August 2007, 529 SCRA 129.
Supra note 38 at 549-554.
Id. at 510-512.
G.R. No. 164195, 30 April 2008, 553 SCRA 237, 247.
Records pp. 99-146.
TSN, 18 September 1997, pp. 37-38.
Rollo (G.R. No. 177404), pp. 108-113; CA rollo, pp. 332-335.
Rollo (G.R. No. 178097), pp. 42-44.
Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, 19 December 2007, 541 SCRA 117,
141; Land Bank of the Philippines v. Wycoco, 464 Phil. 83, 100 (2004), citing Reyes v. National Housing
Authority, 443 Phil. 603, 616 (2003) andRepublic v. Court of Appeals, 433 Phil. 106, 122-123 (2002).
Id. at 142.
Heirs of Roque F. Tabuena v. Land Bank of the Philippines, G.R. No. 180557, 26 September 2008, 566
SCRA 557, 566.
THIRD DIVISION
DEPARTMENT OF AGRARIAN
REFORM (DAR), represented
by
HON.
NASSER C.
PANGANDAMAN,
in
his
capacity
as
DAR
OICSecretary,
Petitio
ner,
G.R. No. 171674
Present:
YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
- versus -
Promulgated:
August 4, 2009
CARMEN S. TONGSON,
Respon
dent.
x----------------------------------------------------x
DECISION
PERALTA, J.:
Before this Court is a Petition for Review

on Certiorari[1] under Rule 45 of the Rules of Court seeking to set
aside the August 30, 2005 Decision[2] and February 10, 2006
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 64176.
The facts of the case:
Respondent Carmen S. Tongson is the owner of four parcels

of agricultural land located in Davao City. Three of these
properties are located in Bayabas, Toril and the other located at
Wangan, Calinan. Since the properties were primarily devoted to
rice and corn under a system of lease-tenancy agreement, the
same were brought under the coverage of Presidential Decree No.
27[4] (PD 27), otherwise known as Tenants Emancipation Decree.
[5]
Sometime in 1988, the petitioner Department of Agrarian

Reform offered to pay respondent P9,000.00 per hectare for her
properties in Bayabas, Toril. Respondent, however, did not act on
the offer as she was then leaving for the United States for her
husbands medical treatment.[6]
In 1989, upon her return to Davao, respondent was

surprised to learn that, except for the portions devoted to
orchards and planted with coconuts, all her properties in Wangan,
Calinan and in Bayabas, Toril were taken over by petitioner. [7]
Respondent alleged that petitioner summarily took her

properties without any notice and had fixed the acquisition cost
for the same at P1,500.00 per hectare for those located at
Bayabas, Toril and P800.00 per hectare for the one located at
Wangan, Calinan. Lastly, respondent alleged that petitioner
subsequently issued Emancipation Patents to the farmerbeneficiaries.[8]
Petitioner denied the allegations and averred that the

properties were placed under the coverage of the agrarian reform
program; hence, not summarily taken. Likewise, petitioner
claimed that respondent was notified of the proceedings when
they made the initial offer to her. Lastly, petitioner claimed that
the acquisition cost was arrived at based on PD 27 in relation to
Executive Order No. 228[9] (EO 228), and that the subsequent
issuance of Emancipation Patents was part of the implementation
of the program.[10]
On October 25, 1993, respondent filed a Petition[11] for

the determination of just compensation before the Special
Agrarian Court (SAC), Branch 15, of the Regional Trial Court of

Davao City. The same was docketed as Civil Case No. 22,408-93.
During the trial, the SAC formed a Board of Commissioners

to appraise the value of the properties. Thereafter, the
commissioners using the market-date approach submitted their
Report.[12] Taking into consideration the value of the neighboring
properties based on sale offerings and sale transactions, the
Commissioners fixed the Bayabas properties at P75,000.00 per
hectare and the Wangan property at P90,000.00 per hectare.[13]
On March 17, 1999, after due deliberation and on the basis

of the Commissioners Report, the SAC rendered a Decision [14] the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the

respondent [herein petitioner] to pay the petitioner [herein
respondent] the following sums:
1.
Twenty-five thousand pesos per hectare for the thirty hectares in

Bayabas, Toril the respondent got and distributed to beneficiaries,
plus legal interest to compute from June 1, 1989 until fully paid.
2.
Forty thousand pesos per hectare for the twenty hectares in

Wangan, Calinan that the respondent got and distributed to
beneficiaries, plus legal interest to compute from June 1, 1989 until
fully paid.
SO ORDERED.[15]
Petitioner then appealed to the CA via Rule 41 of the Rules

of Court arguing in the main that the SAC erred in not applying
the provisions of PD 27 and EO 228 in determining the value of
the properties in dispute.[16]
On August 30, 2005, the CA rendered a Decision, the

dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the appeal is hereby

DISMISSED subject to modification regarding the commissioners fees,
the assailed decision is hereby AFFIRMED.
SO ORDERED.[17]
The CA ruled that Republic Act No. 6657 [18] (RA 6657), or
the Comprehensive Agrarian Reform Law of 1988, was applicable
in the determination of just compensation. It ruled that RA 6657
made all laws pertaining to the agrarian reform program to have
suppletory application only.[19] Furthermore, the CA held that RA
6657 brought under its coverage all agricultural lands, including
those where the process of agrarian reform coverage was started
under PD 27 but was not completed under the decree. [20]
Petitioner filed a Motion for Reconsideration, [21] which was

denied by the CA in the Resolution[22] dated February 10, 2006.
Hence, herein appeal, with petitioner raising a lone

assignment of error, to wit:
THE TRIAL COURT ERRED WHEN IT CONSIDERED

FACTORS NOT THEN EXISTING AT THE TIME OF ITS TAKING,
THUS,
UNDULY
AND
TREMENDOUSLY
INCREASED
THE
VALUATION AND, RESULTANTLY, THE AMOUNT, AS FIXED BELOW,
WAS EXORBITANT, AN OVERPRICE, WHEN CONSIDERED IN THE
LIGHT OF THE FACTS AND CIRCUMSTANCES THEN OCCURING ON
OCTOBER 21, 1972.[23]
The petition is bereft of merit.
Petitioner is adamant that for purposes of computation of

just compensation the same should have been based on PD 27 in
relation to EO 228.
The pertinent portions of PD 27 read:
xxxx
For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the value of
the land shall be equivalent to two and one half (2-1/2) times
the average harvest of three normal crop years immediately
preceding the promulgation of this Decree.
The total cost of the land, including interest at the rate of six (6)
per centum per annum, shall be paid by the tenant in fifteen (15) years
of fifteen (15) equal annual amortizations. (Emphasis supplied)
Implementing the formula under PD 27, EO 228 states:
xxxx
SECTION 2. Henceforth, the valuation of rice and corn lands
covered by P.D. No. 27 shall be based on the average gross
production determined by the Barangay Committee on LandProduction
in accordance with Department Memorandum Circular No. 26, series of
1973 and related issuances and regulation of the Department of
Agrarian Reform. The average gross production per hectare shall
be multiplied by two and a half (2.5), the product of which
shall be multiplied by Thirty-Five Pesos (P35.00), the
government support price for one cavan of 50 kilos of palay on
October 21, 1972, or Thirty-One Pesos (P31.00), the government
support price for one cavan of 50 kilos of corn on October 21,
1972, and the amount arrived at shall be the value of the rice
and corn land, as the case may be, for the purpose of
determining its cost to the farmer and compensation to the
landowner.
On the other hand, respondent contends that RA 6657

should be the basis for the computation of just compensation.
Section 17 of which reads:
Sec.
17. Determination
of
Just
Compensation. In
determining just compensation, the cost of acquisition of the
land, the current value of the like properties, its nature, actual
use and income, the sworn valuation by the owner, the tax
declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits
contributed by the farmers and the farm workers and by the
Government to the property as well as the non-payment of taxes or
loans secured from any government financing institution on the said
land shall be considered as additional factors to determine its

valuation.[24]
Clearly, PD 27 and RA 6657 provide different factors for the

computation of just compensation. The former uses average crop
harvest as a consideration, whereas, the latter uses the current
value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the
assessment made by government assessors as factors for
consideration in determining just compensation.
In the case at bar, it is undisputed by the parties that the

lands were acquired under PD 27. Moreover, it is also undisputed
that just compensation has not yet been settled prior to the
passage of RA 6657. Thus, the issue to be determined is what law
shall govern in the determination of just compensation.
The issue, once the subject of a number of cases, has

finally been settled by this Court in recent years. It has been ruled
that, if just compensation was not settled prior to the passage of
RA 6657, it should be computed in accordance with the said law,
although the property was acquired under PD 27. [25]
In Landbank of the Philippines v. Carolina B. Vda. de Abello,

et al.,
this Court ruled:
[26]
Under the factual circumstances of the case, the agrarian

reform process is still incomplete as the just compensation to be paid
respondents has yet to be settled. Considering the passage RA
6657 before the completion of this process, the just

compensation should be determined and the process
concluded under the said law. Indeed, this Court has time and
again upheld the applicability of RA 6657, with PD 27 and EO 228
having only suppletory effect, conformably with our ruling in Paris v.
Alfeche.
Likewise, in Land Bank of the Philippines vs. Heirs of Angel

T. Domingo,[27] this Court ruled:
In Land Bank v. Natividad, the Court held that the

determination of just compensation in accordance with RA
6657, and not PD 27 and EO 228, is especially imperative
considering that just compensation should be the full and fair
equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and
ample. In this same case, this Court also had the occasion to discuss
the just compensation for PD 27 lands, thus:
Land Banks contention that the property was

acquired for purposes of agrarian reform on October 21,
1972, the time of the effectivity of PD 27, ergo just
compensation should be based on the value of the
property as of that time and not at the time of possession
in 1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of Appeals,
we ruled that the seizure of the landholding did not
take place on the date of effectivity of PD 27 but
would take effect on the payment of just
compensation.
To be sure, the foregoing doctrine can also be found

in Landbank of the Philippines v. Josefina Dumlao et
al[28] and Meneses v. Secretary of Agrarian Reform. [29]
In sum, since the lands in dispute were taken under PD 27

and just compensation has not yet been settled prior to the
passage of RA 6657, the latter law should be made applicable in
conformity with this Courts ruling in the abovementioned cases.
The last issue to be resolved then is when was their actual

taking? The same has already been settled in Domingo where
this Court ruled:
LBPs contention that the property was taken on 21 October

1972, the date of effectivity of PD 27, thus just compensation should
be computed based on the GSP in 1972, is erroneous. The date of
taking of the subject land for purposes of computing just
compensation should be reckoned from the issuance dates of
the emancipation patents. An emancipation patent constitutes the
conclusive authority for the issuance of a Transfer Certificate of Title in
the name of the grantee. It is from the issuance of an emancipation
patent that the grantee can acquire the vested right of ownership in
the landholding, subject to the payment of just compensation to the
landowner.[30]
Hence, it is the date of the issuance of emancipation

patents that should serve as the reckoning point for purposes of
computation of just compensation. Copies of the emancipation
patents
issued
to
the
farmer-beneficiaries,
however,
have not been attached to the records of the case.
Except in certain portions[31] of the RTC decision where one can

infer that the emancipation patents were issued in 1989, this
Court is not certain of the exact date thereof. Hence, this Court is
constrained to remand the case back to the SAC for receipt of
evidence as to the date of the grant of the emancipation patents,
which date shall serve as the reckoning point for the computation
of just compensation due respondent.
WHEREFORE, premises considered, the August 30, 2005

Decision and February 10, 2006 Resolution of the Court of Appeals
in CA-G.R. CV No. 64176 are herebyAFFIRMED. The records of
the case is ordered REMANDED to the Special Agrarian Court,
Branch 15, of the Regional Trial Court of Davao City, for further
reception of evidence as to the date of the grant of the
emancipation patents which shall serve as the basis for the
computation of just compensation in accordance with the marketdata approach pursuant to Republic Act No. 6657.
SO ORDERED.
DIOSDADO M.
PERALTA
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO
Associate Justice
Justice
ANTONIO EDUARDO B. NACHURA
Associate
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been

reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and

the Division Chairpersons Attestation, I certify that the
conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the
Courts Division.
REYNATO
S.
PUNO
Chief Justice
[1]
Rollo, pp. 8-18
[2]
Penned by Associate Justice Rodrigo F. Lim, Jr., with Associate Justices Arturo G. Tayag and Normandie
B. Pizarro concurring; id. at 20-32.

[3]
Rollo, pp. 35-36.
[4]
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL

TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR; October 21, 1972.
[5]
[6]
Rollo, p. 21.
Id. at 22.
[7]
Id.
[8]
Id.
[9]
DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER-BENEFICIARIES COVERED

BY PRESIDENTIAL DECREE NO. 27; DETERMINING THE VALUE OF THE REMANING UNVLAUED RICE
AND CORN LANDS SUBJECT OF P.D. 27; AND PROVIDING FOR THE MANNER OF PAYMENT BY THE
FARMER-BENEFICIARY AND MODE OF COMPENSATION TO THE LAND OWNER.
[10]
Rollo, pp. 23-24 .
[11]
Records, pp. 1-4.
[12]
Id. at 141-144.
[13]
Rollo, p. 24.
[14]
[15]
Id. at 38.
[16]
Rollo, p. 24.
[17]
Id. at 32.
[18]
Effective June 15, 1988.
[19]
Rollo, p. 26.
[20]
Id. at 27.
[21]
Id . at 41-45.
[22]
Supra note 3.
[23]
Rollo, p. 14.
[24]
Emphasis supplied.
[25]
Land Bank of the Philippines v. Josefina Dumlao, et al., G.R. No. 167809, November 27, 2008.
[26]
G.R. No. 168631, April 7, 2009.
[27]
G.R. No. 168533, February 4, 2008, 543 SCRA 627, 640. (Emphasis supplied.)
[28]
Supra note 25.
[29]
G.R. No. 156304, October 23, 2006, 505 SCRA 90.
[30]
Supra note 27, at 642. (Emphasis supplied.)
[31]
10. That from 1989 when the titles of the petitioners were cancelled and emancipation patents given to
beneficiaries up to 1993 when this case was filed, respondent did not even try to confer with the petitioner regarding
just compensation.
xxxx
15. That the unjust taking of the petitioners lands happened in 1989 hence the petitioner is entitled to legal
interest from 1989 until respondent pays in full the purchase price. (CA rollo, pp. 35-36)
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF
AGRARIAN REFORM ADJUDICATION BOARD,respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of
the acquisition of these haciendas by the government under Republic Act No. 6657, the
Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of
Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and
0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by
Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is
registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution.
As head of the provisional government, the President exercised legislative power "until a legislature
is elected and convened under a new Constitution." 1 In the exercise of this legislative power, the
President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the
program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform
Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15,
1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to
sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad
were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer
(MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The
Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO
invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results
of the DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this year
under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and
ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax
Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied
and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to
undulating" approximately 339 hectares under Tax Declaration No. 0234 which also had several actual
occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare
under Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of
sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the
Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended
that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of
P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary Investigation Reports
were submitted by the same officers and representatives. They recommended that 270.0876 hectares
and 75.3800 hectares be placed under compulsory acquisition at a compensation of P8,109,739.00 and
P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago
sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes

Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the DAR's
valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares;
that whether this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land
Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply
within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to
petitioner to determine just compensation for the land; that if petitioner accepts respondent DAR's
offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR
shall take immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda
Palico be opened in favor of the petitioner in view of the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of the
CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for
conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the
two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No.
985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654.
On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a
notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition
under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary
Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance
thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter
to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results
of the MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax Declaration
Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual
occupants and tillers of sugarcane. 20 In the second Report, it was found that approximately 235
hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual occupants
and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under Tax
Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following day,
September 22, 1989, a second Summary Investigation was submitted by the same officers. They
recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed
under compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two
(2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same
day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico,
however, the Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares
and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over
723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in
cash and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda
Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the
effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four
(4) titles TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent
DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions
accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and
T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of
Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its
office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to
the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang
Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it was applying
for conversion of Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18
degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its
application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner,
through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda
Caylaway in light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of
Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1,
1993 stating that the lands subject of referenced titles "are not feasible and
economically sound for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the
Zoning Ordinance reclassifying areas covered by the referenced titles to nonagricultural which was enacted after extensive consultation with government
agencies, including [the Department of Agrarian Reform], and the requisite public
hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8,
1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal
Planning & Development, Coordinator and Deputized Zoning Administrator
addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu,
Batangas has no objection to the conversion of the lands subject of referenced titles
to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR
in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the
haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural
production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to nonagricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned
the expropriation of its properties under the CARL and the denial of due process in the acquisition of
its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on
November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for
reconsideration but the motion was denied on January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE
RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID
ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE
REMEDY IN THE ORDINARY COURSE OF LAW ALL OF WHICH ARE
EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE
COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED
FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO NONAGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH
DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST ZONE,
AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RECLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS
NON-AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST
ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO
DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR
FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS
BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF
PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO GIVE
DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE
SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO

RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED
OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT
PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS
UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE
ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION
OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of
this petition despite petitioner's failure to exhaust administrative remedies; (2) whether the
acquisition proceedings over the three haciendas were valid and in accordance with law; and (3)
assuming the haciendas may be reclassified from agricultural to non-agricultural, whether this court
has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding
that petitioner failed to exhaust administrative remedies. As a general rule, before a party may be
allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means
of administrative redress. This is not absolute, however. There are instances when judicial action
may be resorted to immediately. Among these exceptions are: (1) when the question raised is purely
legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently
illegal; (4) when there is urgent need for judicial intervention; (5) when the respondent acted in
disregard of due process; (6) when the respondent is a department secretary whose acts, as an alter
ego of the President, bear the implied or assumed approval of the latter; (7) when irreparable
damage will be suffered; (8) when there is no other plain, speedy and adequate remedy; (9) when
strong public interest is involved; (10) when the subject of the controversy is private land; and (11)
in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to
require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and
adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries
over portions of petitioner's land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the
Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary,
the land must first be acquired by the State from the landowner and ownership transferred to the former.
The transfer of possession and ownership of the land to the government are conditioned upon
the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation
with an accessible bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner
of any compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account
deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment under
the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust account with
cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of
this compensation was marred by lack of due process. In fact, in the entire acquisition proceedings,
respondent DAR disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action
on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in the
acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two
(2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of
private lands, the following procedures shall be followed:
a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall
contain the offer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowner, his administrator
or representative shall inform the DAR of his acceptance or rejection
of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30) days
after he executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other
muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted
for decision.
e) Upon receipt by the landowner of the corresponding payment, or,
in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the

qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to
the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where the property is located. Within thirty days
from receipt of the Notice of Acquisition, the landowner, his administrator or representative shall
inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and
delivers a deed of transfer in favor of the government and surrenders the certificate of title. Within
thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays
the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the
DAR conducts summary administrative proceedings to determine just compensation for the land.
The landowner, the LBP representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and the amount of just compensation. Upon
receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from
the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank.
The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed
to the farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for
final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the
beneficiaries. However, the law is silent on how the identification process must be made. To fill in this
gap, the DAR issued on July 26, 1989 Administrative Order No.12, Series or 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the
CARP in his area of responsibility. The masterlist shall include such
information as required under the attached CARP Masterlist Form
which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each
title (OCT/TCT) or landholding covered under Phase I and II of the
CARP except those for which the landowners have already filed
applications to avail of other modes of land acquisition. A case folder
shall contain the following duly accomplished forms:
a) CARP CA Form 1 MARO Investigation Report
b) CARP CA Form 2 Summary Investigation Report

of Findings and Evaluation
c) CARP CA Form 3 Applicant's Information Sheet
d) CARP CA Form 4 Beneficiaries Undertaking
e) CARP CA Form 5 Transmittal Report to the
PARO
The MARO/BARC shall certify that all information contained in the
above-mentioned forms have been examined and verified by him and
that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory
Case Acquisition Folder. Invitations to the said conference/meeting
shall also be sent to the prospective farmer-beneficiaries, the BARC
representative(s), the Land Bank of the Philippines (LBP)
representative, and other interested parties to discuss the inputs to
the valuation of the property. He shall discuss the MARO/BARC
investigation report and solicit the views, objection, agreements or
suggestions of the participants thereon. The landowner shall also be
asked to indicate his retention area. The minutes of the meeting shall
be signed by all participants in the conference and shall form an
integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian
Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his
MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of
the land in accordance with A.O. No. 6, Series of 1988. 47 The
valuation worksheet and the related CACF valuation forms shall be duly
certified correct by the PARO and all the personnel who participated in
the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This ocular
inspection and verification shall be mandatory when the computed
value exceeds = 500,000 per estate.
4. Upon determination of the valuation, forward the case folder,
together with the duly accomplished valuation forms and his
recommendations, to the Central Office. The LBP representative and
the MARO concerned shall be furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land

Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO,
review, evaluate and determine the final land valuation of the property
covered by the case folder. A summary review and evaluation report
shall be prepared and duly certified by the BLAD Director and the
personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a Notice of Acquisition (CARP CA Form 8) for the
subject property. Serve the Notice to the landowner personally or
through registered mail within three days from its approval. The
Notice shall include, among others, the area subject of compulsory
acquisition, and the amount of just compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD
shall prepare and submit to the Secretary for approval the Order of
Acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary administrative
hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of
1989. Immediately upon receipt of the DARAB's decision on just
compensation, the BLAD shall prepare and submit to the Secretary
for approval the required Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance,
or upon deposit of payment in the designated bank, in case of
rejection or non-response, the Secretary shall immediately direct the
pertinent Register of Deeds to issue the corresponding Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. Once the property is transferred, the DAR, through the
PARO, shall take possession of the land for redistribution to qualified
beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory Acquisition
Case Folder (CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice
of Coverage" and a "letter of invitation" to a "conference/meeting" over the land covered by the
CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the
Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other
interested parties to discuss the inputs to the valuation of the property and solicit views, suggestions,
objections or agreements of the parties. At the meeting, the landowner is asked to indicate his
retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who
shall complete the valuation of the land. Ocular inspection and verification of the property by the
PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together with his recommendation
to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition
and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property.
The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a
Notice of Acquisition for the subject property. 48 From this point, the provisions of Section 16 of R.A.
6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage
and letter of invitation to a preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with
the requirements of administrative due process. The implementation of the CARL is an exercise of
the State's police power and the power of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police power for the regulation of private
property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is also a taking under the
power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is
required is the surrender of the title to and physical possession of the said excess and all beneficial rights
accruing to the owner in favor of the farmer beneficiary. 51 The Bill of Rights provides that "[n]o person
shall be deprived of life, liberty or property without due process of law." 52 The CARL was not intended to
take away property without due process of law. 53 The exercise of the power of eminent domain requires
that due process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in
1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice
of Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657,"
requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos.
1 & 1.1 including supporting documents.
2. Gathers basic ownership documents listed under
1.a or 1.b above and prepares corresponding
VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives
of the LBP, DENR, BARC and prospective
beneficiaries of the schedule of ocular inspection of
the property at least one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner,
and determine the suitability for
agriculture and productivity of the land
and jointly prepare Field Investigation
Report (CARP Form No. 2), including

the Land Use Map of the property.
b) Interview applicants and assist
them in the preparation of the
Application For Potential CARP
Beneficiary (CARP Form No. 3).
c) Screen prospective farmerbeneficiaries and for those found
qualified, cause the signing of the
respective Application to Purchase
and Farmer's Undertaking (CARP
Form No. 4).
d) Complete the Field Investigation
Report based on the result of the
ocular inspection/investigation of the
property and documents submitted.
See to it that Field Investigation
Report is duly accomplished and
signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in
the conduct of a boundary/ subdivision
survey delineating areas covered by
OLT, retention, subject of VOS, CA (by
phases, if possible), infrastructures,
etc., whichever is applicable.
b) Sends Notice of Coverage (CARP
Form No. 5) to landowner concerned
or his duly authorized representative
inviting him for a conference.
c) Sends Invitation Letter (CARP Form
No. 6) for a conference/public hearing
to prospective farmer-beneficiaries,
landowner, representatives of BARC,
LBP, DENR, DA, NGO's, farmers'
organizations and other interested
parties to discuss the following
matters:
Result of Field
Investigation
Inputs to valuation
Issues raised
Comments/recommen
dations by all parties
concerned.
d) Prepares Summary of Minutes of
the conference/public hearing to be
guided by CARP Form No. 7.
e) Forwards the completed
VOCF/CACF to the Provincial
Agrarian Reform Office (PARO) using
CARP Form No. 8 (Transmittal Memo
to PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder
(VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular
landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC and
prospective beneficiaries of the date of the ocular inspection of the property at least one week before the
scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular
inspection and investigation by identifying the land and landowner, determining the suitability of the land
for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its
investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by
all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land
may also be conducted by a Survey Party of the Department of Environment and Natural Resources
(DENR) to be assisted by the MARO. 55 This survey shall delineate the areas covered by Operation Land
Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS
and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the
landowner or his duly authorized representative inviting him to a conference or public hearing with the
farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), nongovernment organizations, farmer's organizations and other interested parties. At the public hearing, the
parties shall discuss the results of the field investigation, issues that may be raised in relation thereto,
inputs to the valuation of the subject landholding, and other comments and recommendations by all
parties concerned. The Minutes of the conference/public hearing shall form part of the VOCF or CACF
which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the
Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the
RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1,
Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/
Agency/Unit Document
(requirements)
A. Identification and
Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP
to LO by personal delivery Form No. 2
with proof of service, or
registered mail with return
card, informing him that his
property is now under CARP
coverage and for LO to select
his retention area, if he desires
to avail of his right of retention;
and at the same time invites him
to join the field investigation to
be conducted on his property
which should be scheduled at
least two weeks in advance of
said notice.
A copy of said Notice shall CARP
be posted for at least one Form No. 17
week on the bulletin board of
the municipal and barangay
halls where the property is
located. LGU office concerned
notifies DAR about compliance
with posting requirements thru

return indorsement on CARP
Form No. 17.
6 DARMO Send notice to the LBP, CARP
BARC, DENR representatives Form No. 3
and prospective ARBs of the schedule of the field investigation
to be conducted on the subject
property.
7 DARMO With the participation of CARP
BARC the LO, representatives of Form No. 4
LBP the LBP, BARC, DENR Land Use
DENR and prospective ARBs, Map
Local Office conducts the investigation on
subject property to identify
the landholding, determines
its suitability and productivity;
and jointly prepares the Field
Investigation Report (FIR)
and Land Use Map. However,
the field investigation shall
proceed even if the LO, the
representatives of the DENR and
prospective ARBs are not available
provided, they were given due
notice of the time and date of
investigation to be conducted.
Similarly, if the LBP representative
is not available or could not come
on the scheduled date, the field
investigation shall also be conducted,
after which the duly accomplished
Part I of CARP Form No. 4 shall
be forwarded to the LBP
representative for validation. If he agrees
to the ocular inspection report of DAR,
he signs the FIR (Part I) and
accomplishes Part II thereof.
In the event that there is a
difference or variance between
the findings of the DAR and the
LBP as to the propriety of
covering the land under CARP,
whether in whole or in part, on
the issue of suitability to agriculture,
degree of development or slope,
and on issues affecting idle lands,
the conflict shall be resolved by
a composite team of DAR, LBP,
DENR and DA which shall jointly
conduct further investigation
thereon. The team shall submit its

report of findings which shall be
binding to both DAR and LBP,
pursuant to Joint Memorandum
Circular of the DAR, LBP, DENR
and DA dated 27 January 1992.
8 DARMO Screen prospective ARBs
BARC and causes the signing of CARP
the Application of Purchase Form No. 5
and Farmer's Undertaking
(APFU).
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No. 4
the landowner by personal
delivery with proof of
service or registered mail
will return card and posts
a copy thereof for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located.
LGU office concerned CARP
notifies DAR about Form No. 17
compliance with posting
requirement thru return

endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or segregation survey or
DENR delineating areas covered Segregation
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope
and above, unproductive/
unsuitable to agriculture,
retention, infrastructure.
In case of segregation or
subdivision survey, the
plan shall be approved
by DENR-LMS.
C. Review and Completion
of Documents
11. DARMO Forward VOCF/CACF CARP
to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field
investigation and the sending must comply with specific requirements. Representatives of the DAR
Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery with
proof of service, or by registered mail with return card," informing him that his property is under CARP
coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain.
The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at
least two weeks from notice. The field investigation is for the purpose of identifying the landholding and
determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be
posted for at least one week on the bulletin board of the municipal and barangay halls where the property
is located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation
shall be conducted on the date set with the participation of the landowner and the various representatives.
If the landowner and other representatives are absent, the field investigation shall proceed, provided they
were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to
whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree or
development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP,
DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding on
both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal
delivery with proof of service or registered mail with return card." Another copy of the Report and Map
shall likewise be posted for at least one week in the municipal or barangay halls where the property is
located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition
set forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR
A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR
A.O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the landowner that his
property shall be placed under CARP and that he is entitled to exercise his retention right; it also
notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted
where he and representatives of the concerned sectors of society may attend to discuss the results
of the field investigation, the land valuation and other pertinent matters. Under DAR A.O. No. 1,
Series of 1993, the Notice of Coverage also informs the landowner that a field investigation of his
landholding shall be conducted where he and the other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of
invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it
was sent as indicated by a signature and the date received at the bottom left corner of said invitation.
With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel, administrator also of
Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the
conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda
Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various
parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989
was already in effect more than a month earlier. The Operating Procedure in DAR Administrative
Order No. 12 does not specify how notices or letters of invitation shall be sent to the landowner, the
representatives of the BARC, the LBP, the farmer beneficiaries and other interested parties. The
procedure in the sending of these notices is important to comply with the requisites of due process
especially when the owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and
employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before the
DAR, the distinction between natural and juridical persons in the sending of notices may be found in
the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings
before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of Procedure.
Notices and pleadings are served on private domestic corporations or partnerships in the following
manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or
any of its directors. These persons are those through whom the private domestic corporation or
partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that
the corporation will receive prompt and proper notice in an action against it. 63 Service must be made
on a representative so integrated with the corporation as to make it a priori supposable that he will realize
his responsibilities and know what he should do with any legal papers served on him, 64 and bring home to
the corporation notice of the filing of the action. 65Petitioner's evidence does not show the official duties of
Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
Pimentel's duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the notices
were sent and the preliminary conference conducted, petitioner's principal place of business was listed in
respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales
Bldg., 101 Aguirre St., Makati, Metro Manila." 67Pimentel did not hold office at the principal place of
business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in CachoGonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in the
haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business.
The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its
offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel
was notified of the preliminary conference. 68Why respondent DAR chose to notify Pimentel instead of
the officers of the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and
letters of invitation were validly served on petitioner through him, there is no showing that Pimentel
himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP
representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner's

landholdings. Even respondent DAR's evidence does not indicate this authority. On the contrary,
petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given
Pimentel the authority to bind it to whatever matters were discussed or agreed upon by the parties at
the preliminary conference or public hearing. Notably, one year after Pimentel was informed of the
preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice
of Coverage must be sent "to the landowner concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas
found actually subject to CARP were not properly identified before they were taken over by
respondent DAR. Respondents insist that the lands were identified because they are all registered
property and the technical description in their respective titles specifies their metes and bounds.
Respondents admit at the same time, however, that not all areas in the haciendas were placed
under the comprehensive agrarian reform program invariably by reason of elevation or character or
use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only
portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were
targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688
hectares were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various
tax declarations over the haciendas describe the landholdings as "sugarland," and "forest,
sugarland, pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the
land subject to land reform be first identified. The two haciendas in the instant case cover vast tracts
of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the
landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions were
compact or contiguous, and which portions were excluded from CARP coverage. Even respondent
DAR's evidence does not show that petitioner, through its duly authorized representative, was
notified of any ocular inspection and investigation that was to be conducted by respondent DAR.
Neither is there proof that petitioner was given the opportunity to at least choose and identify its
retention area in those portions to be acquired compulsorily. The right of retention and how this right
is exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. . . . .
The right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner; Provided, however, That in case the area selected for
retention by the landowner is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or another agricultural land
with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option within a period of one (1) year from
the time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the
tenant shall have the option to choose whether to remain on the portion or be a beneficiary in the
same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a
Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative
Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard
and processed in accordance with the procedure provided for in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for which no
payment has been made shall be subject to the notice and hearing requirements
provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section
II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard
and processed in accordance with the procedure provided for in Executive Order No.
229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural
lands it deems productive and suitable to farmer cultivation voluntarily offered for
sale to it at a valuation determined in accordance with Section 6. Such transaction
shall be exempt from the payment of capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth
in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the
identification of the land, the notice of coverage and the preliminary conference with the landowner,
representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that these
requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition
should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a
total area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated
January 12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS over the
two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares
thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these portions
are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were
conducted in 1989, and that petitioner, as landowner, was not denied participation therein, The
results of the survey and the land valuation summary report, however, do not indicate whether
notices to attend the same were actually sent to and received by petitioner or its duly authorized
representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating procedure,
much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the
landowner, however, cannot be dispensed with. It is part of administrative due process and is an essential
requisite to enable the landowner himself to exercise, at the very least, his right of retention guaranteed
under the CARL.
III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have
been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of
Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly
reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional
Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and
sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the
Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of
Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992,
the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for
Planning Areas for New Development allegedly prepared by the University of the
Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang
Panlalawigan of Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it
approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort
Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner
present evidence before us that these areas are adjacent to the haciendas subject of this petition, hence,
the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's
landholdings does not ipso facto give this Court the power to adjudicate over petitioner's application
for conversion of its haciendas from agricultural to non-agricultural. The agency charged with the
mandate of approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of
1990. Under this A.O., the application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents and conducts field
investigation and ocular inspection of the property. The findings of the MARO are subject to review
and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further
field investigation and submit a supplemental report together with his recommendation to the
Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five
hectares, the RARO shall approve or disapprove applications for conversion. For lands exceeding
five hectares, the RARO shall evaluate the PARO Report and forward the records and his report to
the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved
or disapproved by the Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section
5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum
Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over
applications for conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to
"approve or disapprove applications for conversion, restructuring or
readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of

1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR,
exclusive authority to approve or disapprove applications for
conversion of agricultural lands for residential, commercial, industrial
and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, likewise empowers the DAR to
authorize under certain conditions, the conversion of agricultural
lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the
Office of the President, provides that "action on applications for land
use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary reference,
documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units
concerned, together with the National Land Use Policy, pursuant to
R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and NonAgricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the
Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land use
conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance,
the guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same time,
recognizing the need of the other sectors of society (housing, industry and
commerce) for land, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization and the optimum use
of land as a national resource for public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR. 89 The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with the
occupants of the land. They involve factual findings and highly technical matters within the special training
and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must
go about its task. This time, the field investigation is not conducted by the MARO but by a special task
force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central
Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice
of Posting. The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The
CLUPPI conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to
ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of Agrarian
Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary.
The procedure does not end with the Secretary, however. The Order provides that the decision of the
Secretary may be appealed to the Office of the President or the Court of Appeals, as the case may
be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and
from the Secretary to the Office of the President or the Court of Appeals as the case
may be. The mode of appeal/motion for reconsideration, and the appeal fee, from
Undersecretary to the Office of the Secretary shall be the same as that of the
Regional Director to the Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of
special competence. 91Respondent DAR is in a better position to resolve petitioner's application for
conversion, being primarily the agency possessing the necessary expertise on the matter. The power to
determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the
coverage of the CARL lies with the DAR, not with this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in
the acquisition proceedings does not give this Court the power to nullify the CLOA's already issued
to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which
has yet to run its regular course. Respondent DAR must be given the chance to correct its
procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to
177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers have been cultivating
their lands. 93 It goes against the basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in
trust for the rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three
haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance
with the guidelines set forth in this decision and the applicable administrative procedure, the case is
hereby remanded to respondent DAR for proper acquisition proceedings and determination of
petitioner's application for conversion.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De
Leon, Jr., JJ., concur.
Melo, J., please see concurring and dissenting opinion.
Ynares-Santiago, J., concurring and dissenting opinion.
Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.
Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.
Pardo, J., I join the concurring and dissenting opinion of J. Santiago.
Separate Opinions
MELO, J., concurring and dissenting opinion;
I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment of
the issues. However, I would like to call attention to two or three points which I believe are deserving
of special emphasis.
The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled the
non-agricultural nature of the property as early as 1975. Related to this are the inexplicable
contradictions between DAR's own official issuances and its challenged actuations in this particular
case.
Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law
declared Nasugbu, Batangas as a tourist zone.
Considering the new and pioneering stage of the tourist industry in 1975, it can safely be assumed
that Proclamation 1520 was the result of empirical study and careful determination, not political or
extraneous pressures. It cannot be disregarded by DAR or any other department of Government.
In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we
ruled that local governments need not obtain the approval of DAR to reclassify lands from
agricultural to non-agricultural use. In the present case, more than the exercise of that power, the
local governments were merely putting into effect a law when they enacted the zoning ordinances in
question.
Any doubts as to the factual correctness of the zoning reclassifications are answered by the
February 2, 1993 certification of the Department of Agriculture that the subject landed estates are
not feasible and economically viable for agriculture, based on the examination of their slope, terrain,
depth, irrigability, fertility, acidity, and erosion considerations.
I agree with the ponencia's rejection of respondent's argument that agriculture is not incompatible
and may be enforced in an area declared by law as a tourist zone. Agriculture may contribute to the
scenic views and variety of countryside profiles but the issue in this case is not the beauty of
ricefields, cornfields, or coconut groves. May land found to be non-agricultural and declared as a
tourist zone by law, be withheld from the owner's efforts to develop it as such? There are also plots
of land within Clark Field and other commercial-industrial zones capable of cultivation but this does
not subject them to compulsory land reform. It is the best use of the land for tourist purposes, free
trade zones, export processing or the function to which it is dedicated that is the determining factor.
Any cultivation is temporary and voluntary.
The other point I wish to emphasize is DAR's failure to follow its own administrative orders and
regulations in this case.
The contradictions between DAR administrative orders and its actions in the present case may be
summarized:
1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion No.
44, Series of 1990 that lands classified as non-agricultural prior to June 15, 1988 when the CARP
Law was passed are exempt from its coverage. By what right can DAR now ignore its own
Guidelines in this case of land declared as forming a tourism zone since 1975?
2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous
property of Group Developers and Financiers, Inc. (GDFI) into the Batulao Tourist Resort. Why
should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found to be
similar in nature and declared as such?
3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted
13.5 hectares of petitioner's property also found in Caylaway together, and similarly situated, with the
bigger parcel (Hacienda Caylaway) subject of this petition from CARL coverage. To that extent, it
admits that its earlier blanket objections are unfounded.
4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage as:
(a) Land found by DAR as no longer suitable for agriculture and
which cannot be given appropriate valuation by the Land Bank;
(b) Land where DAR has already issued a conversion order;
(c) Land determined as exempt under DOJ Opinions Nos. 44 and
181; or
(d) Land declared for non-agricultural use by Presidential
Proclamation.
It is readily apparent that the land in this case falls under all the above categories except the second
one. DAR is acting contrary to its own rules and regulations.
I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity of
the above administrative orders.
DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV outlines
the procedure for reconveyance of land where CLOAs have been improperly issued. The procedure
is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR which treats
the procedure as "enshrined . . . in Section 50 of Republic Act No. 6657" (Respondent's Rejoinder).
Administrative Order No. 3, Series of 1996 shows there are no impediments to administrative or
judicial cancellations of CLOA's improperly issued over exempt property. Petitioner further submits,
and this respondent does not refute, that 25 CLOAs covering 3,338 hectares of land owned by the
Manila Southcoast Development Corporation also found in Nasugbu, Batangas, have been
cancelled on similar grounds as those in the case at bar.
The CLOAs in the instant case were issued over land declared as non-agricultural by a presidential
proclamation and confirmed as such by actions of the Department of Agriculture and the local
government units concerned. The CLOAs were issued over adjoining lands similarly situated and of
like nature as those declared by DAR as exempt from CARP coverage. The CLOAs were
surprisingly issued over property which were the subject of pending cases still undecided by DAR.
There should be no question over the CLOAs having been improperly issued, for which reason, their
cancellation is warranted.
YNARES-SANTIAGO, J., concurring and dissenting opinion;

I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions and
the dispositive portion.
With all due respect, the majority opinion centers on procedure but unfortunately ignores the
substantive merits which this procedure should unavoidably sustain.
The assailed decision of the Court of Appeals had only one basic reason for its denial of the
petition, i.e., the application of the doctrine of non-exhaustion of administrative remedies. This
Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now
states that the issuance of CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its
property without just compensation. It rules that the acts of the Department of Agrarian Reform are
patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust
administrative remedies before DAR was not a plain, speedy, and adequate remedy. Correctly,
petitioner sought immediate redress from the Court of Appeals to this Court.
However, I respectfully dissent from the judgment which remands the case to the DAR. If the acts of
DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should
be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally
issued CLOAs, must be declared null and void.
Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu,
Batangas, namely: Hacienda Palico comprising of an area of 1,024 hectares more or less, covered
by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad
comprising an area of 1,050 hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p.
205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT Nos.
T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex "P"; Rollo, p. 217), T-44663
(Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition, Annex "R"; Rollo, p. 221).
Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of either
denying or approving the applications, DAR ignored and sat on them for seven (7) years. In the
meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in Palico
and Caylaway from CARP coverage. The majority of the properties were parceled out to alleged
farmer-beneficiaries, one at a time, even as petitioner's applications were pending and unacted
upon.
The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for acquisition of
private lands.
The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of
1989 for the identification of the land to be acquired. DAR did not follow its own prescribed
procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.
The procedure on the evaluation and determination of land valuation, the duties of the Municipal
Agrarian Reform Officer (MARO), the Barangay Agrarian Reform Committee (BARC), Provincial
Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD), the
documentation and reports on the step-by-step process, the screening of prospective Agrarian
Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other mandatory
procedures were not followed. The landowner was not properly informed of anything going on.
Equally important, there was no payment of just compensation. I agree with the ponencia that due
process was not observed in the taking of petitioner's properties. Since the DAR did not validly
acquire ownership over the lands, there was no acquired property to validly convey to any
beneficiary. The CLOAs were null and void from the start.
Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only,
thereby disregarding the procedural requirement that notices be served personally or by registered
mail. This is not disputed by respondents, but they allege that petitioner changed its address without
notifying the DAR. Notably, the procedure prescribed speaks of only two modes of service of notices
of acquisition personal service and service by registered mail. The non-inclusion of other modes
of service can only mean that the legislature intentionally omitted them. In other words, service of a
notice of acquisition other than personally or by registered mail is not valid. Casus omissus pro
omisso habendus est. The reason is obvious. Personal service and service by registered mail are
methods that ensure the receipt by the addressee, whereas service by ordinary mail affords no
reliable proof of receipt.
Since it governs the extraordinary method of expropriating private property, the CARL should be
strictly construed. Consequently, faithful compliance with its provisions, especially those which relate
to the procedure for acquisition of expropriated lands, should be observed. Therefore, the service by
respondent DAR of the notices of acquisition to petitioner by ordinary mail, not being in conformity
with the mandate of R.A. 6657, is invalid and ineffective.
With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no notices of
acquisition were issued by the DAR, should be declared invalid.
The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures
promulgated by law and DAR and how they have not been complied with. There can be no debate
over the procedures and their violation. However, I respectfully dissent in the conclusions reached in
the last six pages. Inspite of all the violations, the deprivation of petitioner's rights, the non-payment
of just compensation, and the consequent nullity of the CLOAs, the Court is remanding the case to
the DAR for it to act on the petitioner's pending applications for conversion which have been unacted
upon for seven (7) years.
Petitioner had applications for conversion pending with DAR. Instead of deciding them one way or
the other, DAR sat on the applications for seven (7) years. At that same time it rendered the
applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial
of the applications because DAR had effectively denied the application against the applicant without
rendering a formal decision. This kind of action preempted any other kind of decision except denial.
Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact
denied on November 8, 1993.
There are indisputable and established factors which call for a more definite and clearer judgment.
The basic issue in this case is whether or not the disputed property is agricultural in nature and
covered by CARP. That petitioner's lands are non-agricultural in character is clearly shown by the
evidence presented by petitioner, all of which were not disputed by respondents. The disputed
property is definitely not subject to CARP.
The nature of the land as non-agricultural has been resolved by the agencies with primary
jurisdiction and competence to decide the issue, namely (1) a Presidential Proclamation in 1975;
(2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the Municipality of
Nasugbu, approved by the Province of Batangas; and (4) by clear inference and admissions,
Administrative Orders and Guidelines promulgated by DAR itself.
The records show that on November 20, 1975 even before the enactment of the CARP law, the
Municipality of Nasugbu, Batangas was declared a "tourist zone" in the exercise of lawmaking power
by then President Ferdinand E. Marcos under Proclamation No. 1520 (Rollo, pp. 122-123). This
Presidential Proclamation is indubitably part of the law of the land.
On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a
zonification ordinance (Rollo, pp. 124-200), pursuant to its powers under Republic Act No. 7160, i.e.,
the Local Government Code of 1991. The municipal ordinance was approved by the Sangguniang
Panlalawigan of Batangas (Rollo, p. 201). Under this enactment, portions of the petitioner's
properties within the municipality were re-zonified as intended and appropriate for non-agricultural
uses. These two issuances, together with Proclamation 1520, should be sufficient to determine the
nature of the land as non-agricultural. But there is more.
The records also contain a certification dated March 1, 1993 from the Director of Region IV of the
Department of Agriculture that the disputed lands are no longer economically feasible and sound for
agricultural purposes (Rollo, p. 213).
DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-agricultural
when it affirmed the force and effect of Presidential Proclamation 1520. In an Order dated January
22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings owned by
Group Developer and Financiers, Inc. in Nasugbu pursuant to the Presidential Proclamation. The
property alongside the disputed properties is now known as "Batulao Resort Complex". As will be
shown later, the conversion of various other properties in Nasugbu has been ordered by DAR,
including a property disputed in this petition, Hacienda Caylaway.
Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's
haciendas are agricultural, citing, among other things, petitioner's acts of voluntarily offering
Hacienda Caylaway for sale and applying for conversion its lands from agricultural to nonagricultural.
Respondents, on the other hand, did not only ignore the administrative and executive decisions. It
also contended that the subject land should be deemed agricultural because it is neither residential,
commercial, industrial or timber. The character of a parcel of land, however, is not determined
merely by a process of elimination. The actual use which the land is capable of should be the
primordial factor.
RA 6657 explicitly limits its coverage thus:
The Comprehensive Agrarian Reform Law of 1998 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229, including other lands
of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account,
ecological, developmental and equity considerations, shall have determined by law,
the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture;
and
(d) All private lands devoted to or suitable for a agriculture regardless of the
agricultural products raised or that can be raised thereon." (RA 6657, Sec. 4;
emphasis provided)
In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty,
Inc. v. Department of Agrarian Reform, this Court had occasion to rule that agricultural lands are only
those which are arable and suitable.
It is at once noticeable that the common factor that classifies land use as agricultural, whether it be
public or private land, is its suitability for agriculture. In this connection, RA 6657 defines "agriculture"
as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of
the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish,
including the harvesting of such farm products, and other farm activities, and
practices performed by a farmer in conjunction with such farming operations done by
persons whether natural or juridical. (RA 6657, sec. 3[b])
In the case at bar, petitioner has presented certifications issued by the Department of Agriculture to
the effect that Haciendas Palico, Banilad and Caylaway are not feasible and economically viable for
agricultural development due to marginal productivity of the soil, based on an examination of their
slope, terrain, depth, irrigability, fertility, acidity, and erosion factors (Petition, Annex "L", Rollo, p. 213;
Annex "U", Rollo, p. 228). This finding should be accorded respect considering that it came from
competent authority, said Department being the agency possessed with the necessary expertise to
determine suitability of lands to agriculture. The DAR Order dated January 22, 1991 issued by
respondent itself stated that the adjacent land now known as the Batulao Resort Complex is hilly,
mountainous, and with long and narrow ridges and deep gorges. No permanent sites are planted.
Cultivation is by kaingin method. This confirms the findings of the Department of Agriculture.
Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity of the
reclassification of petitioner's lands by the Sangguniang Bayan of Nasugbu, Batangas, pursuant to
Section 20 of the Local Government Code of 1991. It shows that the condition imposed by
respondent Secretary of Agrarian Reform on petitioner for withdrawing its voluntary offer to sell
Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been adequately met. In fact,
the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by petitioner
and likewise located in Caylaway, exempted it from the coverage of CARL (Order dated May 17,
1999; Annex "D" of Petitioner's Manifestation), on these grounds.
Furthermore, and perhaps more importantly, the subject lands are within an area declared in 1975
by Presidential Proclamation No. 1520 to be part of a tourist zone. This determination was made
when the tourism prospects of the area were still for the future. The studies which led to the land
classification were relatively freer from pressures and, therefore, more objective and open-minded.
Respondent, however, contends that agriculture is not incompatible with the lands' being part of a
tourist zone since "agricultural production, by itself, is a natural asset and, if properly set, can
command tremendous aesthetic value in the form of scenic views and variety of countryside
profiles." (Comment, Rollo, 579).
The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush
greeneries. Verily, tourism is enhanced by structures and facilities such as hotels, resorts, rest
houses, sports clubs and golf courses, all of which bind the land and render it unavailable for
cultivation. As aptly described by petitioner:
The development of resorts, golf courses, and commercial centers is inconsistent
with agricultural development. True, there can be limited agricultural production
within the context of tourism development. However, such small scale farming
activities will be dictated by, and subordinate to the needs or tourism development. In
fact, agricultural use of land within Nasugbu may cease entirely if deemed necessary
by the Department of Tourism (Reply, Rollo, p. 400).
The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell Hacienda
Caylaway should not be deemed an admission that the land is agricultural. Rather, the offer was
made by petitioner in good faith, believing at the time that the land could still be developed for
agricultural production. Notably, the offer to sell was made as early as May 6, 1988, before the soil
thereon was found by the Department of Agriculture to be unsuitable for agricultural development
(the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's withdrawal of its
voluntary offer to sell, therefore, was not borne out of a whimsical or capricious change of heart.
Quite simply, the land turned out to be outside of the coverage of the CARL, which by express
provision of RA 6657, Section 4, affects only public and private agricultural lands. As earlier stated,
only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the application for a lot in
Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences proving
the Caylaway area to be non-agricultural (DAR Order dated 17 May 1999, in Case No. A-9999-05097, Annex "D" Manifestation).
The DAR itself has issued administrative circulars governing lands which are outside of CARP and
may not be subjected to land reform. Administrative Order No. 3, Series of 1996 declares in its policy
statement what landholdings are outside the coverage of CARP. The AO is explicit in providing that
such non-covered properties shall be reconveyed to the original transferors or owners.
These non-covered lands are:
a. Land, or portions thereof, found to be no longer suitable for
agriculture and, therefore, could not be given appropriate valuation by
the Land Bank of the Philippines (LBP);
b. Those were a Conversion Order has already been issued by the
DAR allowing the use of the landholding other than for agricultural
purposes in accordance with Section 65 of R.A. No. 6657 and
Administrative Order No. 12, Series of 1994;
c. Property determined to be exempted from CARP coverage
pursuant to Department of Justice Opinion Nos. 44 and 181; or
d. Where a Presidential Proclamation has been issued declaring the
subject property for certain uses other than agricultural. (Annex "F",
Manifestation dated July 23, 1999)
The properties subject of this Petition are covered by the first, third, and fourth categories of the
Administrative Order. The DAR has disregarded its own issuances which implement the law.
To make the picture clearer, I would like to summarize the law, regulations, ordinances, and official
acts which show beyond question that the disputed property is non-agricultural, namely:
(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the
land. It declares the area in and around Nasugbu, Batangas, as a Tourist Zone. It has
not been repealed, and has in fact been used by DAR to justify conversion of other
contiguous and nearby properties of other parties.
(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan
of Nasugbu, affirmed by the Sangguniang Panlalawigan of Batangas, expressly
defines the property as tourist, not agricultural. The power to classify its territory is
given by law to the local governments.
(c) Certification of the Department of Agriculture that the property is not suitable and
viable for agriculture. The factual nature of the land, its marginal productivity and
non-economic feasibility for cultivation, are described in detail.
(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into
the Batulao Resorts Complex. DAR described at length the non-agricultural nature of
Batulao and of portion of the disputed property, particularly Hacienda Caylaway.
(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994
subscribes to the Department of Justice opinion that the lands classified as nonagricultural before the CARP Law, June 15, 1988, are exempt from CARP. DAR
Order dated January 22, 1991 led to the Batulao Tourist Area. DAR Order in Case
No. H-9999-050-97, May 17, 1999, exempted 13.5 hectares of Caylaway, similarly
situated and of the same nature as Batulao, from coverage. DAR Administrative
Order No. 3, Series of 1996, if followed, would clearly exclude subject property from
coverage.
As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.
In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has
submitted a municipal map of Nasugbu, Batangas (Annex "E", Manifestation dated July 23, 1999).
The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property, now
Batulao Tourist Resort, shows that the properties subject of this case are equally, if not more so,
appropriate for conversion as the GDFI resort.
Petitioner's application for the conversion of its lands from agricultural to non-agricultural was meant
to stop the DAR from proceeding with the compulsory acquisition of the lands and to seek a clear
and authoritative declaration that said lands are outside of the coverage of the CARL and can not be
subjected to agrarian reform.
Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to recognize
Presidential Proclamation No. 1520, stating that respondent DAR has not been consistent in its
treatment of applications of this nature. It points out that in the other case involving adjoining lands in
Nasugbu, Batangas, respondent DAR ordered the conversion of the lands upon application of Group
Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order dated January 22,
1991 denying the motion for reconsideration filed by the farmers thereon and finding that:
In fine, on November 27, 1975, or before the movants filed their instant motion for
reconsideration, then President Ferdinand E. Marcos issued Proclamation No. 1520,
declaring the municipalities of Maragondon and Ternate in the province of Cavite and
the municipality of Nasugbu in the province of Batangas as tourist zone. Precisely,
the landholdings in question are included in such proclamation. Up to now, this office
is not aware that said issuance has been repealed or amended (Petition, Annex
"W"; Rollo, p. 238).
The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of DAR
dated August 20, 1999), show that DAR has been inconsistent to the extent of being arbitrary.
Apart from the DAR Orders approving the conversion of the adjoining property now called Batulao
Resort Complex and the DAR Order declaring parcels of the Caylaway property as not covered by
CARL, a major Administrative Order of DAR may also be mentioned.
The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of Petitioner's
Manifestation) stated that DAR was given authority to approve land conversions only after June 15,
1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion, DAR issued its
AO No. 06, Series of 1994 providing for the Guidelines on Exemption Orders (Annex "B", Id.). The
DAR Guidelines state that lands already classified as non-agricultural before the enactment of CARL
are exempt from its coverage. Significantly, the disputed properties in this case were classified as
tourist zone by no less than a Presidential Proclamation as early as 1975, long before 1988.
The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the Constitution
guarantees that "(n)o person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied the equal protection of the laws" (Constitution, Art. III, Sec. 1).
Respondent DAR, therefore, has no alternative but to abide by the declaration in Presidential
Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc., and to treat
petitioners' properties in the same way it did the lands of Group Developers, i.e., as part of a tourist
zone not suitable for agriculture.
On the issue of non-payment of just compensation which results in a taking of property in violation of
the Constitution, petitioner argues that the opening of a trust account in its favor did not operate as
payment of the compensation within the meaning of Section 16 (e) of RA 6657. In Land Bank of the
Philippines v. Court of Appeals (249 SCRA 149, at 157 [1995]), this Court struck down as null and
void DAR Administrative Circular No. 9, Series of 1990, which provides for the opening of trust
accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.
It is very explicit therefrom (Section 16 [e]) that the deposit must be made only in
"cash" or in "LBP bonds." Nowhere does it appear nor can it be inferred that the
deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or
at least, qualifying words ought to have appeared from which it can be fairly deduced
that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA
6657 to warrant an expanded construction of the term "deposit."
xxx xxx xxx
In the present suit, the DAR clearly overstepped the limits of its powers to enact rules
and regulations when it issued Administrative Circular No. 9. There is no basis in
allowing the opening of a trust account in behalf of the landowner as compensation
for his property because, as heretofore discussed, section 16(e) of RA 6657 is very
specific that the deposit must be made only in "cash" or in "LBP bonds." In the same
vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these
implementing regulations cannot outweigh the clear provision of the law. Respondent
court therefore did not commit any error in striking down Administrative Circular No. 9
for being null and void.
There being no valid payment of just compensation, title to petitioner's landholdings cannot be validly
transferred to the Government. A close scrutiny of the procedure laid down in Section 16 of RA 6657
shows the clear legislative intent that there must first be payment of the fair value of the land subject
to agrarian reform, either directly to the affected landowner or by deposit of cash or LBP bonds in the
DAR-designated bank, before the DAR can take possession of the land and request the register of
deeds to issue a transfer certificate of title in the name of the Republic of the Philippines. This is only
proper inasmuch as title to private property can only be acquired by the government after payment of
just compensation In Association of Small Landowners in the Philippines v. Secretary of Agrarian
Reform (175 SCRA 343, 391 [1989]), this Court held:
The CARP Law, for its part, conditions the transfer of possession and ownership of
the land to the government on receipt of the landowner of the corresponding
payment or the deposit by the DAR of the compensation in cash or LBP bonds with
an accessible bank. Until then, title also remains with the landowner. No outright
change of ownership is contemplated either.
Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their
distribution to farmer-beneficiaries were illegal inasmuch as no valid payment of compensation for
the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the
beneficiaries after the DAR takes actual possession of the land (RA 6657, Sec. 24), which in turn
should only be after the receipt by the landowner of payment or, in case of rejection or no response
from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA
6657, Sec. 16[e]).
Respondents argue that the Land Bank ruling should not be made to apply to the compulsory
acquisition of petitioner's landholdings in 1993, because it occurred prior to the promulgation of the
said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on
constitutional considerations, where the prospective application would result in a violation of a
constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a
valid payment of just compensation, thus violating the Constitutional mandate that "(p)rivate property
shall not be taken for public use without just compensation" (Constitution, Art. III, Sec. 9). Hence, to
deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it came later than
the actual expropriation would be repugnant to petitioner's fundamental rights.
The controlling last two (2) pages of the ponencia state:
Finally, we stress that the failure of respondent DAR to comply with the requisites of
due process in the acquisition proceedings does not give this Court the power to
nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is
to short-circuit the administrative process, which has yet to run its regular course.
Respondent DAR must be given the chance to correct its procedural lapses in the
acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177
farmer beneficiaries in 1993. Since then until the present, these farmers have been
cultivating their lands. It goes against the basic precepts of justice, fairness and
equity to deprive these people, through no fault of their own, of the land they till.
Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of
the land.
I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the DAR to
first reverse and correct itself.
Given the established facts, there was no valid transfer of petitioner's title to the Government. This
being so, there was also no valid title to transfer to third persons; no basis for the issuance of
CLOAs.
Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of title
is sufficient to invalidate them.
The Court of Appeals said so in its Resolution in this case. It stated:
Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries
prior to the deposit of the offered price constitutes violation of due process, it must be
stressed that the mere issuance of the CLOAs does not vest in the farmer/grantee
ownership of the land described therein.
At most the certificate merely evidences the government's recognition of the grantee
as the party qualified to avail of the statutory mechanisms for the acquisition of
ownership of the land. Thus failure on the part of the farmer/grantee to comply with
his obligations is a ground for forfeiture of his certificate of transfer. Moreover, where
there is a finding that the property is indeed not covered by CARP, then reversion to
the landowner shall consequently be made, despite issuance of CLOAs to the
beneficiaries. (Resolution dated January 17, 1997, p. 6)
DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of Petitioner's
Manifestation) outlines the procedure for the reconveyance to landowners of properties found to be
outside the coverage of CARP. DAR itself acknowledges that they can administratively cancel
CLOAs if found to be erroneous. From the detailed provisions of the Administrative Order, it is
apparent that there are no impediments to the administrative cancellation of CLOAs improperly
issued over exempt properties. The procedure is followed all over the country. The DAR Order spells
out that CLOAs are not Torrens Titles. More so if they affect land which is not covered by the law
under which they were issued. In its Rejoinder, respondent DAR states:
3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously issued
Emancipation Patents (EPs) or Certificate of Landownership Awards (CLOAs), same
is enshrined, it is respectfully submitted, in Section 50 of Republic Act No. 6657.
In its Supplemental Manifestation, petitioner points out, and this has not been disputed by
respondents, that DAR has also administratively cancelled twenty five (25) CLOAs covering
Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas
landholdings. These lands were found not suitable for agricultural purposes because of soil and
topographical characteristics similar to those of the disputed properties in this case.
The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991
approving the development of property adjacent and contiguous to the subject properties of this case
into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has decided
that the land
1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by

poor soil condition and nomadic method of cultivation, hence not suitable to
agriculture."
2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian
Reform Team Leader Benito Viray to be "generally rolling, hilly and mountainous and
strudded (sic) with long and narrow ridges and deep gorges. Ravines are steep
grade ending in low dry creeks."
3. Is found in an. area where "it is quite difficult to provide statistics on rice and corn
yields because there are no permanent sites planted. Cultivation is
by Kaingin Method."
4. Is contiguous to Roxas Properties in the same area where "the people entered the
property surreptitiously and were difficult to stop because of the wide area of the two
haciendas and that the principal crop of the area is sugar . . .." (emphasis supplied).
I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by
Torrens Titles, the properties falling under improperly issued CLOAs are cancelled by mere
administrative procedure which the Supreme Court can declare in cases properly and adversarially
submitted for its decision. If CLOAs can under the DAR's own order be cancelled administratively,
with more reason can the courts, especially the Supreme Court, do so when the matter is clearly in
issue.
With due respect, there is no factual basis for the allegation in the motion for intervention that
farmers have been cultivating the disputed property.
The property has been officially certified as not fit for agriculture based on slope, terrain, depth,
irrigability, fertility, acidity, and erosion. DAR, in its Order dated January 22, 1991, stated that "it is
quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there are
no permanent sites planted. Cultivation is by kaingin method." Any allegations of cultivation, feasible
and viable, are therefore falsehoods.
The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered the
property surreptitiously and were difficult to stop . . .."
The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their
dissenting opinion (Rollo, p. 116), are relevant:
2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous
individuals who distort the spirit of the Agrarian Reform Program in order to turn out
quick profits. Petitioner has submitted copies of CLOAs that have been issued to
persons other than those who were identified in the Emancipation Patent Survey
Profile as legitimate Agrarian Reform beneficiaries for particular portions of
petitioner's lands. These persons to whom the CLOAs were awarded, according to
petitioner, are not and have never been workers in petitioner's lands. Petitioners say
they are not even from Batangas but come all the way from Tarlac. DAR itself is not
unaware of the mischief in the implementation of the CARL in some areas of the
country, including Nasugbu. In fact, DAR published a "WARNING TO THE PUBLIC"
which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this
malpractice.
2.10 Agrarian Reform does not mean taking the agricultural property of one and
giving it to another and for the latter to unduly benefit therefrom by subsequently
"converting" the same property into non-agricultural purposes.
2.11 The law should not be interpreted to grant power to the State, thru the DAR, to
choose who should benefit from multi-million peso deals involving lands awarded to
supposed agrarian reform beneficiaries who then apply for conversion, and thereafter
sell the lands as non-agricultural land.
Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not titles.
They state that "rampant selling of rights", should this occur, could be remedied by the cancellation
or recall by DAR.
In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R. No.
131457, April 24, 1998), this Court found the CLOAs given to the respondent farmers to be
improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a
stronger case than petitioners in the aforementioned case. The procedural problems especially the
need for referral to the Court of Appeals are not present. The instant petition questions the Court of
Appeals decision which acted on the administrative decisions. The disputed properties in the present
case have been declared non-agricultural not so much because of local government action but by
Presidential Proclamation. They were found to be non-agricultural by the Department of Agriculture,
and through unmistakable implication, by DAR itself. The zonification by the municipal government,
approved by the provincial government, is not the only basis.
On a final note, it may not be amiss to stress that laws which have for their object the preservation
and maintenance of social justice are not only meant to favor the poor and underprivileged. They
apply with equal force to those who, notwithstanding their more comfortable position in life, are
equally deserving of protection from the courts. Social justice is not a license to trample on the rights
of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed
against them. As we held in Land Bank (supra.):
It has been declared that the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to deny justice to the
landowner whenever truth and justice happen to be on his side. As eloquently stated
by Justice Isagani Cruz:
. . . social justice or any justice for that matter is for the
deserving, whether he be a millionaire in his mansion or a pauper in
his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor simply because they are
poor, to whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to prefer the poor simply because
they are poor, or to eject the rich simply because they are rich, for
justice must always be served, for poor and rich alike, according to
the mandate of the law.
IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare
Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu, Batangas, to be non-agricultural
and outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land
Ownership Award issued by respondent Department of Agrarian Reform null and void and to enjoin
respondents from proceeding with the compulsory acquisition of the lands within the subject
properties. I finally vote to DENY the motion for intervention.
Footnotes
1 Art. II, Section 1, Proclamation No. 3.

2 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175
SCRA 343, 366 [1989].
3 Annex "2" to Comment, Rollo, p. 309.
4 Id.
5 Annex "3" to Comment, Rollo, pp. 310-314.
6 Annex "4" to Comment, Rollo, pp. 315-315C. Unlike Annexes "3" and "5," the list of actual
occupants was not attached to the MARO Report.
7 Annex "5" to Comment, Rollo, pp. 316-316E.
9 Annexes "7" and "8" to Comment, Rollo, pp. 317, 319.
11 Id.
12 Annexes "9," "10" and "11" to Comment, Rollo, pp. 320-322.
13 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.
14 Petition, p. 20, Rollo, p. 30.
15 Annexes "16," "17," "18," and "19" to Comment, Rollo, pp. 327-330.
18 Id.
22 Minutes of the Conference/Meeting, Annex "27" to Comment, Rollo, p. 357.

26 Id.
29 Annexes "37" and "38" to Comment, Rollo, pp. 367368.
30 Annexes "42" and "43" to Comment, Rollo, pp. 372-374. In its Comment before this Court,
respondent DAR states that valuation of the land under TCT No. T-44662 had not been
completed, while the land under TCT No. T-44665 was not distributed due to errors in the
qualifications of the farmer beneficiaries Comment, p. 16, Rollo, p. 587.
31 Id.
34 Annex "S" to Petition, Rollo, pp. 223-224.
36 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.
37 Annex "V" to Petition, Rollo, pp. 229-230.
38 Petition, p, 27, Rollo, p, 37.
39 The CA decision was penned by Justice Gloria C. Paras and concurred in by Justices
Serafin Guingona and Eubulo Verzola.
40 The Resolution was penned by Justice Paras and concurred in by Justices Jainal Rasul
(vice J. Guingona who retired) and Portia Hormachuelos. Justice Verzola wrote a dissenting
opinion which Justice Delilah Magtolis joined.
41 Petition, pp. 28-29, Rollo, pp. 38-39.
42 Corona v. Court of Appeals, 214 SCRA 378, 393 [1992]; Sunville Timber Products, Inc. v.
Abad, 206 SCRA 482, 487 [1992]; Quisumbing v. Gumban, 193 SCRA 520, 523-524 [1991].
43 Sec. 24, R.A. 6657.
42 Association of Small Landowners of the Philippines v. DAR Secretary, 175 SCRA 343,
391 [1989].
45 Land Bank of the Philippines v. Court of Appeals, 249 SCRA 149, 157 [1995].
46 Prefatory Statement, DAR Administrative Order No. 12, Series of 1989.
47 Now repealed by Administrative Order No. 17, Series of 1989.
48 Id., at 174-175.
49 Id., at 175-177.
50 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175
SCRA 343, 373-374 [1989].
51 Id.
52 Sec. 1, Article III, 1987 Constitution.
53 Development Bank of the Philippines v. Court of Appeals, 262 SCRA 245, 253 [1996].
54 Prior to DAR A.O. No. 9, Series of 1990, VOS transactions were governed by A.O. No. 3;
Series of 1989 and A.O. No. 19, Series of 1989 while CA transactions were governed by A.O.
No. 12, Series of 1989.
55 The DENR's participation was added by DAR A.O. No. 9, Series of 1990.
56 The Department of Agriculture became part of the field investigation team. Under A.O. No.
9, Series of 1990, a representative of the DA was merely invited to attend the conference or
public hearing.
58 Id.
60 Comment, p. 16, Rollo, p. 587.
61 Petition, p, 5, Rollo, p. 15.
62 R. Martin, Civil Procedure, p. 461 [1989].
63 Delta Motors Sales Corp. vs. Mangosing, 70 SCRA 598, 603 [1976].
64 Lee v. Court of Appeals, 205 SCRA 752, 765 [1992]; G & G Trading Corp. v. Court of
Appeals, 158 SCRA 466, 468 [1988]; Villa Rey Transit, Inc. v. Far East Motor Corp., 81
SCRA 298, 303 [1978].
65 Delta Motors Sales Corp. vs. Mangosing, supra, at 603; Rebollido v. Court of Appeals,
170 SCRA 800, 809-810, [1989].
66 See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308; see
also MARO Investigation Reports, Annexes "3", "4", "5" to Respondent's Comment, Rollo pp.
310, 315, 316; Annexes "6", "7", "8" to Respondents' Comment, Rollo pp. 317-319.
67 See Notices of Acquisition for Hacienda Banilad, Annexes "21" and "22" to
Comment, Rollo, pp. 332, 333.
68 See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308;
Notices of Acquisition for Hacienda Banilad, Annexes "21" and "22" to Comment, Rollo, pp.
332, 333.
69 Paragraph 5 (b), Part IV-B, A.O. 9, Series of 1990.
70 Rejoinder of Respondents, pp. 3-4, Rollo, pp. 434-435.
71 Annexes "12" to "15" to Respondents' Comment, Rollo, pp. 361-363; Annexes "31" to "33"
to Respondents' Comment, Rollo, pp. 324-326.
73 VOS transactions were later governed by A.O. No. 9, Series of 1990, and A.O. No. 1,
Series of 1993 both also covering lands subject to Compulsory Acquisition.
74 Sec. 5, E.O. 229.
75 Annexes "42" and "43" to Comment, Rollo, pp. 372-374.
76 Sur-rejoinder, p. 3.
77 Annexes "39" and "40" to Comment, Rollo, pp., 369-370.
79 Petition, pp. 38-39, rollo, pp. 48-49; Supplemental Manifestation, p. 3.
80 Petition, p. 25, Rollo, p. 35; Annex "U" to the Petition, Rollo, p. 228.
81 Annex "E" to Petition, Rollo, p. 124.
82 Attached to Annex "E," Rollo, pp. 125-200.
83 Id.
84 Annex "F" to Petition, Rollo, p. 201.
85 Manifestation, pp. 3-4; Supplemental Manifestation, p. 4.
86 Manifestation, p. 4; Supplemental Manifestation, p. 5.
87 Part II, DAR A.O. No. 7, Series of 1997.
88 Prefatory Statement, DAR A.O. No. 7, Series of 1997.

89 Part III, E, F, DAR A.O. No. 7, Series of 1997.
90 Par. 3, C, Part VIII; Part XIV, DAR A.O. No. 7, Series of 1997.
91 First Lepanto Ceramics, Inc. v. Court of Appeals, 253 SRA 552, 558 [1996]; Machete v.
Court of Appeals, 250 SCRA 176, 182 [1995]; Vidad v. Regional Trial Court of Negros
Oriental, 227 SCRA 271, 276 [1990].
92 Motion for intervention, pp. 1-5, Rollo, pp. 452-456.
93 Id.
SECOND DIVISION
LAND
BANK
THEPHILIPPINES,
OF
Petitioner,
G.R. No.
166777
Present:
QUISUMBING,* J.,Chairperson,
CARPIO, **
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
- versus -
SPS.
VICENTE
M.
ESTANISLAO and LUZ B.
HERMOSA,
Respondent
s.
Promulgated:
July 10, 2007
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
The Land Bank of the Philippines (petitioner) challenges, via petition for
review, the Court of Appeals Decision[1] dated October 13, 2004 and
Resolution[2] dated January 19, 2005 affirming the valuation and determination of
just compensation by the Regional Trial Court of Balanga City, Branch I, sitting as
a Special Agrarian Court (SAC).
Petitioner, a government financial institution, organized and existing under
Republic Act (R.A.) No. 3844,[3] is the duly designated financial intermediary of
the Comprehensive Agrarian Reform Program under R.A. No. 6657, as amended or
the COMPREHENSIVE AGRARIAN REFORM LAW OF 1988.[4]
Spouses Vicente M. Estanislao and Luz B. Hermosa (respondents) are the
registered owners of eight parcels of land situated in Hermosa, Bataan with a total
land area of 10.8203 hectares covered by Transfer Certificates of Title Nos. T137114, T-137115, T-137116, T-137117, T-137118, T-137119, T-119275 and T136253.
Sometime in 1996, 1997 and 1999, 10.5321 hectares (subject lots) of
respondents lands were awarded to tenant-beneficiaries[5] pursuant to the
Operation Land Transfer Program (OLT) under Presidential Decree (P.D.) No. 27.[6]
Applying Executive Order (E.O.) 228,[7] petitioner, together with the
Department of Agrarian Reform (DAR), valued the subject lots at P97,895
or P1.075 per square meter,[8] which was arrived at by multiplying 80 cavans per
hectare,[9] the average gross production as determined by the Barangay Committee
on Land Production, by 2.5, the result of which was multiplied by P35, the
government support price for one cavan of 50 kilos of palay as of October 21,
1972, to which was added the amount of P139,194.02 as interest increment per
DAR Administrative Order 13, series of 1994, or for a total amount
of P237,089.02.[10]
The following table shows the formula used by petitioner and the DAR to
compute the amount payable to respondents:
LV (land value) = AGP (average gross production) x 2.5 x GSP (government
support price)
Title No. Lot Nos.
Area
Acquired
Orig.
Valuation
137114
137115
137116
137117
137118
137119
0.0596 ha.
1.3457 ha.
0.4643 ha.
0.3564 ha.
0.1318 ha.
0.3414 ha.
2.6992 has.
4.9300 has.
2.9029 has.
P417.20
P9, 419.90
P3,250.10
P2,494.80
P922.60
P2,389.80
P18,894.40
P34,510.00
P44,490.60
10.5321
has
P97,895.00
119275
136253
Total
823
823
823
823
823
823
Sub Total
823
830
Interest
Increment
per
DAR
A.O.
13
series
of
1994
Total
Amount due
to
Landowner
P49,246.64
P89,947.38
(covered by
DAR Order
of
Replacement
)
P139,194.02
P68,141.04
P124,457.38
P44,490.60
P237,089.02
Upon the request of the DAR, petitioner deposited the amount

of P237,089.02, in cash and in bond, in favor of respondents. Respondents,
however, rejected the DARsvaluation by letter[11] dated April 21,1997.
Respondents subsequently filed a complaint[12] on June 7, 2001, before the
SAC, against the DAR, petitioner, and the OLT tenant-beneficiaries
namely: EncarnacionDesenganio, Honorio M.
Torres,
Alfredo
Cortez, Lucio Tolentino, Elizalde S.
Mendoza, Adelmo R. Tolentino,
Clarita
T. Torio and Maricar R. Tolentino, for the determination of fair market value and
the payment of just compensation. The case was docketed as Civil Case No. 7312.
In their complaint, respondents prayed that the fair market value for
purposes of just compensation be pegged at P2,106,420 or P20 per square
meter since the subject lots form one whole compact area, contig[u]ous to each
other, adjacent to Layac River, [and] traversed by the Bataan National highway
at Layac Junction, with irrigation systems put in place and planted twice
annually.[13]
In their respective Answers to the complaint, petitioner and the DAR prayed
for its dismissal, claiming that their valuation was made pursuant to P.D. No. 27
and/or E.O. 228.
The SAC, which named a panel of Commissioners to receive and evaluate
evidence on the amount of compensation to be paid to respondents, rendered a
Decision[14] on October 8, 2003, fixing the just compensation at P20 per square
meter, noting the August 6, 2002 report[15]of the Chairman of the Commissioners
that the subject lots are located along the Roman Super-Highway and that the
beneficiaries were harvesting at least 100 cavans per hectare in every
harvest.[16] The dispositive portion of the SAC decision reads:
WHEREFORE, in view of the foregoing, it is hereby ordered that the
valuation for the properties covered by TCT Nos. T-137114, T-137115, T-137116,
T-137117, T-137118, T-137119, T-119275 and T-136253 is hereby fixed at P20.00
per square meter which this Court considers as just and reasonable, no
pronouncement as to cost.
SO ORDERED.[17] (Emphasis supplied)
Only petitioner filed a motion for reconsideration[18] of the decision of the

SAC, which motion was denied, hence, petitioner appealed to the Court of Appeals
which affirmed the SAC decision.
Its motion for reconsideration of the appellate courts decision having been
denied, the present petition for review was filed, raising the issue of whether or
not the special agrarian court can disregard the formula prescribed under P.D. No.
27 and E.O. 228 in fixing the just compensation of P.D. 27-covered land.[19]
That the subject lots fall within the coverage of P.D. No. 27 which became
effective on October 21, 1972 is not disputed.
E.O. 228, issued on July 17, 1987, by then President Corazon Aquino,
provided the basis for determining the value of remaining unvalued rice and corn
lands subject to P.D. No. 27. Section 2 of E.O. 228 reads:
SECTION 2. Henceforth, the valuation of rice and corn lands covered by P.D.
No. 27 shall be based on the average gross production determined by
the Barangay Committee on Land Production in accordance with Department
Memorandum Circular No. 26, Series of 1973, and related issuances and
regulations of the Department of Agrarian Reform. The average gross production
per hectare shall be multiplied by two and a half (2.5), the product of which shall
be multiplied by Thirty Five Pesos ( P35.00), the government support price for
one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos
(P31.00), the government support price for one cavan of 50 kilos of corn on
October 21, 1972, and the amount arrived at shall be the value of the rice and corn
land, as the case may be, for the purpose of determining its cost to the farmer and
compensation to the landowner.
xxxx
Petitioner, citing Gabatin v. Land Bank of the Philippines,[20] contends that

the taking of the subject lots was deemed effected on October 21, 1972, when
respondents were, under P.D. No. 27 deprived of ownership over the subject lands
in favor of qualified beneficiaries.[21]
Petitioner further contends that the fixing of the value of the land under E.O.
228, using the government support price of P35 for one cavan of 50 kilos
of palay as ofOctober 21, 1972, was in keeping with the settled rule that just
compensation should be based on the value of the property at the time of taking.[22]
The petition is bereft of merit.
This Court held in Land Bank of the Philippines v. Natividad[23] that seizure
of landholdings or properties covered by P.D. No. 27 did not take place on October
21, 1972, but upon the payment of just compensation. Taking into account the
passage in 1988 of R.A. No. 6657 pending the settlement of just compensation,
this Court concluded that it is R.A. No. 6657 which is the applicable law, with P.D.
No. 27 and E.O. 228 having only suppletory effect.
Land Bank's contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD 27, ergo
just compensation should be based on the value of the property as of that time and
not at the time of possession in 1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of Appeals, we ruled that the seizure of
the landholding did not take place on the date of effectivity of PD 27 but would
take effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian reform process is
still incomplete as the just compensation to be paid private respondents has yet to
be settled. Considering the passage of Republic Act No. 6657 (RA 6657) before
the completion of this process, the just compensation should be determined and
the process concluded under the said law. Indeed, RA 6657 is the applicable law,
with PD 27 and EO 228 having only suppletory effect, conformably with our
ruling in Paris v. Alfeche.
xxxx
It would certainly be inequitable to determine just compensation based on
the guideline provided by PD 27 and EO 228 considering the DAR's failure to
determine the just compensation for a considerable length of time. That just
compensation should be determined in accordance with RA 6657 , and not PD
27 or EO 228, is especially imperative considering that just compensation should
be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
In this case, the trial court arrived at the just compensation due private
respondents for their property, taking into account its nature as irrigated land,
location along the highway, market value, assessor's value and the volume and
value of its produce. This Court is convinced that the trial court correctly
determined the amount of just compensation due private respondents in
accordance with, and guided by, RA 6657 and existing jurisprudence.
[24]
(Emphasis and underscoring supplied; citations omitted)
It bears noting that the valuation of subject lots at P20 per square meter,
which is even below that made by the Chairman of the Commission (P50) and by
the Provincial Assessor (P25), took into consideration the lots classification,
valuation and assessment by the Office of the Provincial Assessor,[25] as first class
agricultural land for tax purposes. This is not to mention that subject lots are
located along the Roman Super-Highway [26] and the industrial zone, as projected by
the Province of Bataan.[27]
In fine, the valuation of subject lots is in accordance with Section 17 of R.A.

No. 6657 reading:
Sec. 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the
farm-workers and by the Government to the property as well as the non-payment
of taxes or loans secured from any government financing institution on the said
land shall be considered as additional factors to determine its valuation.
and, therefore, in order.

WHEREFORE, the petition is DENIED. The Decision dated October 13,
2004 and Resolution dated January 19, 2005 of the Court of Appeals are hereby
AFFIRMED.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice
WE CONCUR:
(ON OFFICIAL LEAVE)

LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO
Associate Justice
Acting Chairperson
DANTE O. TINGA
Associate Justice

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
ANTONIO T. CARPIO
Associate Justice
Acting Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII, of the Constitution and the Division
Acting Chairpersons Attestation, I hereby certify that the conclusions in the above
decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
*
**
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
On Official Leave.
Acting Chairperson.
CA rollo, pp. 127-133. The decision was penned by Associate Justice Jose Catral Mendoza and concurred in
by Associate Justices Godardo A. Jacinto and Edgardo P. Cruz.
Id. at 158.
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND
REFORMS IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND THE
CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING
AGENCIES, APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES.
AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE
SOCIAL JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES.
Records, p. 5.
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR.
DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER BENEFICIARIES COVERED BY
PRESIDENTIAL DECREE NO. 27: DETERMINING THE VALUE OF REMAINING UNVALUED RICE
AND CORN LANDS SUBJECT TO P.D. NO. 27; AND PROVIDING FOR THE MANNER OF PAYMENT
BY THE FARMER BENEFICIARY AND MODE OF COMPENSATION TO THE LANDOWNER.
Records, p. 53.
Id. at 88-94.
Id. at 87. Vide, Records, p. 9.
Id. at 13.
Id. at 2-7.
Id. at 5.
Id. at 162-166.
Id. at 114-115.
Id. at 114.
Id. at 166.
Id. at 167-176.
Rollo, p. 31.
G.R. No. 148223, November 25, 2004, 444 SCRA 176.
Rollo, pp. 35-36.
Id. at 35.
G.R. No. 127198, May 16, 2005, 458 SCRA 441.
Id. at 451-453.
Records, p. 120.
Id. at 114.
CA rollo, p. 152.
Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 108280-83 November 16, 1995

ROMEO SISON, NILO PACADAR, JOEL TAN, RICHARD DE LOS SANTOS, and JOSELITO
TAMAYO,petitioners,
vs.
PEOPLE OF THE PHILIPPINES and COURT OF APPEALS, respondents.
G.R. Nos. 114931-33 November 16, 1995
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ANNIE FERRER, accused, ROMEO SISON, NILO PACADAR, JOEL TAN, RICHARD DE LOS
SANTOS, and JOSELITO TAMAYO, accused-appellants.
PUNO, J.:
The case before us occurred at a time of great political polarization in the aftermath of the 1986
EDSA Revolution. This was the time when the newly-installed government of President Corazon C.
Aquino was being openly challenged in rallies, demonstrations and other public fora by "Marcos
loyalists," supporters of deposed President Ferdinand E. Marcos. Tension and animosity between
the two (2) groups sometimes broke into violence. On July 27, 1986, it resulted in the murder of
Stephen Salcedo, a known "Coryista."
From August to October 1986, several informations were filed in court against eleven persons
identified as Marcos loyalists charging them with the murder of Salcedo. Criminal Case No. 8647322 was filed against Raul Billosos y de Leon and Gerry Nery y Babazon; Criminal Case No. 8647617 against Romeo Sison y Mejia, Nilo Pacadar y Abe and Joel Tan y Mostero; Criminal Case No.
86-47790 against Richard de los Santos y Arambulo; Criminal Case No. 86-48538 against Joselito
Tamayo y Ortia; and Criminal Case No. 86-48931 against Rolando Fernandez y Mandapat. Also filed
were Criminal Cases Nos. 86-49007 and 86-49008 against Oliver Lozano and Benjamin Nuega as
well as Annie Ferrer charging them as accomplices to the murder of Salcedo.
The cases were consolidated and raffled to the Regional Trial Court, Branch XLIX, Manila. All of the
accused pleaded not guilty to the charge and trial ensued accordingly. The prosecution presented
twelve witnesses, including two eyewitnesses, Ranulfo Sumilang and Renato Banculo, and the
police officers who were at the Luneta at the time of the incident. In support of their testimonies, the
prosecution likewise presented documentary evidence consisting of newspaper accounts of the
incident and various photographs taken during the mauling.
The prosecution established that on July 27, 1986, a rally was scheduled to be held at the Luneta by
the Marcos loyalists. Earlier, they applied for a permit to hold the rally but their application was
denied by the authorities. Despite this setback, three thousand of them gathered at the Rizal
Monument of the Luneta at 2:30 in the afternoon of the scheduled day. Led by Oliver Lozano and
Benjamin Nuega, both members of the Integrated Bar of the Philippines, the loyalists started an
impromptu singing contest, recited prayers and delivered speeches in between. Colonel Edgar Dula
Torres, then Deputy Superintendent of the Western Police District, arrived and asked the leaders for
their permit. No permit could be produced. Colonel Dula Torres thereupon gave them ten minutes to
disperse. The loyalist leaders asked for thirty minutes but this was refused. Atty. Lozano turned
towards his group and said "Gulpihin ninyo ang lahat ng mga Cory infiltrators." Atty. Nuega added
"Sige, sige gulpihin ninyo!" The police then pushed the crowd, and used tear gas and truncheons to
disperse them. The loyalists scampered away but some of them fought back and threw stones at the
police. Eventually, the crowd fled towards Maria Orosa Street and the situation later stabilized. 1
At about 4:00 p.m., a small group of loyalists converged at the Chinese Garden, Phase III of the
Luneta. There, they saw Annie Ferrer, a popular movie starlet and supporter of President Marcos,
jogging around the fountain. They approached her and informed her of their dispersal and Annie
Ferrer angrily ordered them "Gulpihin ninyo and mga Cory hecklers!" Then she continued jogging
around the fountain chanting "Marcos pa rin, Marcos pa rin, Pabalikin si Marcos, Pabalikin si
Marcos, Bugbugin ang mga nakadilaw!" The loyalists replied "Bugbugin!" A few minutes later, Annie
Ferrer was arrested by the police. Somebody then shouted "Kailangang gumanti, tayo ngayon!" A
commotion ensued and Renato Banculo, a cigarette vendor, saw the loyalists attacking persons in
yellow, the color of the "Coryistas." Renato took off his yellow shirt. 2 He then saw a man wearing a
yellow t-shirt being chased by a group of persons shouting "Iyan, habulin iyan. Cory iyan!" The man in the
yellow t-shirt was Salcedo and his pursuers appeared to be Marcos loyalists. They caught Salcedo and
boxed and kicked and mauled him. Salcedo tried to extricate himself from the group but they again
pounced on him and pummelled him with fist blows and kicks hitting him on various parts of his body.
Banculo saw Ranulfo Sumilang, an electrician at the Luneta, rush to Salcedo's aid. Sumilang tried to
pacify the maulers so he could extricate Salcedo from them. But the maulers pursued Salcedo
unrelentingly, boxing him with stones in their fists. Somebody gave Sumilang a loyalist tag which
Sumilang showed to Salcedo's attackers. They backed off for a while and Sumilang was able to tow
Salcedo away from them. But accused Raul Billosos emerged from behind Sumilang as another man
boxed Salcedo on the head. Accused Richard de los Santos also boxed Salcedo twice on the head and
kicked him even as he was already fallen. 3 Salcedo tried to stand but accused Joel Tan boxed him on the
left side of his head and ear. 4 Accused Nilo Pacadar punched Salcedo on his nape, shouting: "Iyan, Cory
Iyan. Patayin!" 5Sumilang tried to pacify Pacadar but the latter lunged at the victim again. Accused Joselito
Tamayo boxed Salcedo on the left jaw and kicked him as he once more fell. Banculo saw accused Romeo
Sison trip Salcedo and kick him on the head, and when he tried to stand, Sison repeatedly boxed
him. 6 Sumilang saw accused Gerry Neri approach the victim but did not notice what he did. 7
Salcedo somehow managed to get away from his attackers and wipe off the blood from his face. He
sat on some cement steps 8 and then tried to flee towards Roxas boulevard to the sanctuary of the Rizal
Monument but accused Joel Tan and Nilo Pacadar pursued him, mauling Sumilang in the process.
Salcedo pleaded for his life exclaiming "Maawa na kayo sa akin. Tulungan ninyo ako." He cried: "Pulis,
pulis. Wala bang pulis?" 9
The mauling resumed at the Rizal Monument and continued along Roxas Boulevard until Salcedo
collapsed and lost consciousness. Sumilang flagged down a van and with the help of a traffic officer,
brought Salcedo to the Medical Center Manila but he was refused admission. So they took him to
the Philippine General Hospital where he died upon arrival.
Salcedo died of "hemorrhage, intracranial traumatic." He sustained various contusions, abrasions,

lacerated wounds and skull fractures as revealed in the following post-mortem findings:
Cyanosis, lips, and nailbeds.
Contused-abrasions: 6.0 x 2.5 cm., and 3.0 x 2.4 cm., frontal region, right side; 6.8 x
4.2 cm., frontal region, left side; 5.0 x 4.0 cm., right cheek; 5.0 x 3.5 cm., face, left
side; 3.5 x 2.0 cm., nose; 4.0 x 2.1 cm., left ear, pinna; 5.0 x 4.0 cm. left
suprascapular region; 6.0 x 2.8 cm., right elbow.
Abrasions: 4.0 x 2.0 cm., left elbow; 2.0 x 1.5 cm., right knee.
Lacerated wounds: 2.2 cm., over the left eyebrow; 1.0 cm., upper lip.
Hematoma, scalp; frontal region, both sides; left parietal region; right temporal
region; occipital region, right side.
Fractures, skull; occipital bone, right side; right posterior cranial fossa; right anterior
cranial fossa.
Hemorrhage, subdural, extensive.
Other visceral organs, congested.
Stomach, about 1/2 filled with grayish brown food materials and fluid. 10
The mauling of Salcedo was witnessed by bystanders and several press people, both local and
foreign. The press took pictures and a video of the event which became front-page news the
following day, capturing national and international attention. This prompted President Aquino to order
the Capital Regional Command and the Western Police District to investigate the incident. A reward
of ten thousand pesos (P10,000.00) was put up by Brigadier General Alfredo Lim, then Police Chief,
for persons who could give information leading to the arrest of the killers. 11 Several persons, including
Ranulfo Sumilang and Renato Banculo, cooperated with the police, and on the basis of their identification,
several persons, including the accused, were apprehended and investigated.
For their defense, the principal accused denied their participation in the mauling of the victim and
offered their respective alibis. Accused Joselito Tamayo testified that he was not in any of the
photographs presented by the prosecution 12 because on July 27, 1986, he was in his house in Quezon
City. 13 Gerry Neri claimed that he was at the Luneta Theater at the time of the
incident. 14 Romeo Sison, a commercial photographer, was allegedly at his office near the Luneta waiting
for some pictures to be developed at that time. 15 He claimed to be afflicted with hernia impairing his
mobility; he cannot run normally nor do things forcefully. 16 Richard de los Santos admits he was at the
Luneta at the time of the mauling but denies hitting Salcedo. 17 He said that he merely watched the
mauling which explains why his face appeared in some of the photographs. 18 Unlike the other accused,
Nilo Pacadar admits that he is a Marcos loyalist and a member of the Ako'y Pilipino Movement and that
he attended the rally on that fateful day. According to him, he saw Salcedo being mauled and like Richard
de los Santos, merely viewed the incident. 19 His face was in the pictures because he shouted to the
maulers to stop hitting Salcedo. 20 Joel Tan also testified that he tried to pacify the maulers because he
pitied Salcedo. The maulers however ignored him. 21
The other accused, specifically Attys. Lozano and Nuega and Annie Ferrer opted not to testify in
their defense.
On December 16, 1988, the trial court rendered a decision finding Romeo Sison, Nilo Pacadar, Joel
Tan, Richard de los Santos and Joselito Tamayo guilty as principals in the crime of murder qualified
by treachery and sentenced them to 14 years 10 months and 20 days of reclusion temporal as
minimum to 20 years of reclusion temporal as maximum. Annie Ferrer was likewise convicted as an
accomplice. The court, however, found that the prosecution failed to prove the guilt of the other
accused and thus acquitted Raul Billosos, Gerry Nery, Rolando Fernandez, Oliver Lozano and
Benjamin Nuega. The dispositive portion of the decision reads as follows:
WHEREFORE, judgement is hereby rendered in the aforementioned cases as
follows:
1. In "People versus Raul Billosos and Gerry Nery," Criminal Case No. 86-47322, the
Court finds that the Prosecution failed to prove the guilt of the two (2) Accused
beyond reasonable doubt for the crime charged and hereby acquits them of said
charge;
2. In "People versus Romeo Sison, et al.," Criminal Case No. 86-47617, the Court
finds the Accused Romeo Sison, Nilo Pacadar and Joel Tan, guilty beyond
reasonable doubt, as principals for the crime of Murder, defined in Article 248 of the
Revised Penal Code, and, there being no other mitigating or aggravating
circumstances, hereby imposes on each of them an indeterminate penalty of from
FOURTEEN (14)YEARS, TEN (10) MONTHS and TWENTY (20) DAYS, of Reclusion
Temporal, as minimum, to TWENTY (20) DAYS, of Reclusion Temporal, as minimum,
to TWENTY (20) YEARS ofReclusion Temporal, as Maximum;
3. In "People versus Richard de los Santos," Criminal Case No. 86-47790, the Court
finds the Accused Richard de los Santos guilty beyond reasonable doubt as principal
for the crime of Murder defined in Article 248 of the Revised Penal Code and, there
being no other extenuating circumstances, the Court hereby imposes on him an
indeterminate penalty of from FOURTEEN (14) YEARS, TEN (10) MONTHS and
TWENTY (20) DAYS of Reclusion Temporal, as Minimum, to TWENTY (20) YEARS
of Reclusion Temporal as Maximum;
4. In "People versus Joselito Tamayo," Criminal Case No. 86-48538 the Court finds
the Accused guilty beyond reasonable doubt as principal, for the crime of "Murder"
defined in Article 248 of the Revised Penal Code and hereby imposes on him an
indeterminate penalty of from FOURTEEN (14) YEARS, TEN (10) MONTHS and
TWENTY (20) DAYS of Reclusion Temporal, as Minimum, to TWENTY (20) YEARS
of Reclusion Temporal, as Maximum;
5. In "People versus Rolando Fernandez," Criminal Case No. 86-4893l, the Court
finds that the Prosecution failed to prove the guilt of the Accused for the crime
charged beyond reasonable doubt and hereby acquits him of said charge;
6. In "People versus Oliver Lozano, et al.," Criminal Case No. 86-49007, the Court
finds that the Prosecution failed to prove the guilt of the Accused beyond reasonable
doubt for the crime charged and hereby acquits them of said charge;
7. In "People versus Annie Ferrer," Criminal Case No. 86-49008, the Court finds the
said Accused guilty beyond reasonable doubt, as accomplice to the crime of Murder
under Article 18 in relation to Article 248 of the Revised Penal Code and hereby
imposes on her an indeterminate penalty of NINE (9) YEARS and FOUR (4)
MONTHS of Prision Mayor, as Minimum to TWELVE (12) YEARS, FIVE (5)
MONTHS and ELEVEN (11) DAYS of Reclusion Temporal, as Maximum.
The Accused Romeo Sison, Nilo Pacadar, Richard de los Santos, Joel Tan, Joselito
Tamayo and Annie Ferrer are hereby ordered to pay, jointly and severally, to the heirs
of Stephen Salcedo the total amount of P74,000.00 as actual damages and the
amount of P30,000.00 as moral and exemplary damages, and one-half (1/2) of the
costs of suit.
The period during which the Accused Nilo Pacadar, Romeo Sison, Joel Tan, Richard
de los Santos and Joselito Tamayo had been under detention during the pendency of
these cases shall be credited to them provided that they agreed in writing to abide by
and comply strictly with the rules and regulations of the City Jail.
The Warden of the City Jail of Manila is hereby ordered to release the Accused Gerry
Nery, Raul Billosos and Rolando Fernandez from the City Jail unless they are being
detained for another cause or charge.
The Petition for Bail of the Accused Rolando Fernandez has become moot and
academic. The Petition for Bail of the Accused Joel Tan, Romeo Sison and Joselito
Tamayo is denied for lack of merit.
The bail bonds posted by the Accused Oliver Lozano and Benjamin Nuega are
hereby cancelled. 22
On appeal, the Court of Appeals 23 on December 28, 1992, modified the decision of the trial court by
acquitting Annie Ferrer but increasing the penalty of the rest of the accused, except for Joselito Tamayo,
to reclusion perpetua. The appellate court found them guilty of murder qualified by abuse of superior
strength, but convicted Joselito Tamayo of homicide because the information against him did not allege
the said qualifying circumstance. The dispositive portion of the decision reads:
PREMISES CONSIDERED, the decision appealed from is hereby MODIFIED as
follows:
1. Accused-appellants Romeo Sison y Mejia, Nilo Pacadar y Abe, Joel Tan y Mostero
and Richard de los Santos are hereby found GUILTY beyond reasonable doubt of
Murder and are each hereby sentenced to suffer the penalty of Reclusion Perpetua;
2. Accused-appellant Joselito Tamayo y Oria is hereby found GUILTY beyond
reasonable doubt of the crime of Homicide with the generic aggravating
circumstance of abuse of superior strength and, as a consequence, an indeterminate
penalty of TWELVE (12) YEARS of prision mayor as Minimum to TWENTY (20)
YEARS of reclusion temporal as Maximum is hereby imposed upon him;
3. Accused-appellant Annie Ferrer is hereby ACQUITTED of being an accomplice to
the crime of Murder.
CONSIDERING that the penalty of Reclusion Perpetua has been imposed in the
instant consolidated cases, the said cases are now hereby certified to the Honorable
Supreme Court for review. 24
Petitioners filed G.R. Nos. 108280-83 under Rule 45 of the Revised Rules of Court inasmuch as
Joselito Tamayo was not sentenced to reclusion perpetua. G.R. Nos. 114931-33 was certified to us
for automatic review of the decision of the Court of Appeals against the four accused-appellants
sentenced to reclusion perpetua.
Before this court, accused-appellants assign the following errors:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT NOTED
THAT THE ACCUSED FAILED TO CITE ANYTHING ON RECORD TO SUPPORT
THEIR AVERMENT THAT THERE WERE NO WITNESSES WHO HAVE COME
FORWARD TO IDENTIFY THE PERSONS RESPONSIBLE FOR THE DEATH OF
STEPHEN SALCEDO.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GIVING
CREDENCE TO THE UNRELIABLE, DOUBTFUL, SUSPICIOUS AND
INCONCLUSIVE TESTIMONIES OF PROSECUTION WITNESS RANULFO
SUMILANG.
III
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN FINDING THE
ACCUSED GUILTY WHEN THERE WAS NO EVIDENCE TO PROVE THAT ANY OF
THE ACCUSED CARRIED A HARD AND BLUNT INSTRUMENT, THE ADMITTED
CAUSE OF THE HEMORRHAGE RESULTING IN THE DEATH OF THE
DECEASED.
IV
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
THERE EXISTS CONSPIRACY AMONG THE PRINCIPAL ACCUSED.
V
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
THE CRIME COMMITTED IS MURDER AND NOT DEATH (HOMICIDE) CAUSED IN
A TUMULTUOUS AFFRAY. 25
In their additional brief, appellants contend that:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REACHING A
CONCLUSION OF FACT UTILIZING SPECULATIONS, SURMISES, NONSEQUITUR CONCLUSIONS, AND EVEN THE DISPUTED DECISION OF THE
TRIAL COURT, TO UPHOLD THE VALIDITY OF THE VERY SAME JUDGMENT,
ALL CONTRARY TO THE RULES OF EVIDENCE.
II
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING EXHIBITS "D",
"G", "O", "P", "V", TO "V-48", "W" TO "W-13", ALL OF WHICH WERE NOT
PROPERLY IDENTIFIED.
III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING
THAT CONSPIRACY EXISTED IN THE CASE AT BAR DISREGARDING
ALTOGETHER THE SETTLED JURISPRUDENCE ON THE MATTER.
IV
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
THE CRIME COMMITTED WAS MURDER, NOT DEATH (HOMICIDE) IN
TUMULTUOUS AFFRAY SIDESTEPPING IN THE PROCESS THE FACTUAL
GROUNDS SURROUNDING THE INCIDENT. 26
Appellants mainly claim that the Court of Appeals erred in sustaining the testimonies of the
two in prosecution eyewitnesses, Ranulfo Sumilang and Renato Banculo, because they are
unreliable, doubtful and do not deserve any credence. According to them, the testimonies of
these two witnesses are suspect because they surfaced only after a reward was announced
by General Lim. Renato Banculo even submitted three sworn statements to the police
geared at providing a new or improved version of the incident. On the witness stand, he
mistakenly identified a detention prisoner in another case as accused Rolando

Fernandez. 27 Ranulfo Sumilang was evasive and unresponsive prompting the trial court to
reprimand him several times. 28
There is no proof that Banculo or Sumilang testified because of the reward announced by General
Lim, much less that both or either of them ever received such reward from the government. On the
contrary, the evidence shows that Sumilang reported the incident to the police and submitted his
sworn statement immediately two hours after the mauling, even before announcement of any
reward. 29 He informed the police that he would cooperate with them and identify Salcedo's assailants if
he saw them again. 30
The fact that Banculo executed three sworn statements does not make them and his testimony
incredible. The sworn statements were made to identify more suspects who were apprehended
during the investigation of Salcedo's death. 31
The records show that Sumilang was admonished several times by the trial court on the witness
stand for being argumentative and evasive. 32 This is not enough reason to reject Sumilang's testimony
for he did not exhibit this undesirable conduct all throughout his testimony. On the whole, his testimony
was correctly given credence by the trial court despite his evasiveness at some instances. Except for
compelling reasons, we cannot disturb the way trial courts calibrate the credence of witnesses
considering their visual view of the demeanor of witnesses when on the witness stand. As trial courts,
they can best appreciate the verbal and non-verbal dimensions of a witness' testimony.
Banculo's mistake in identifying another person as one of the accused does not make him an entirely
untrustworthy witness. 33 It does not make his whole testimony a falsity. An honest mistake is not
inconsistent with a truthful testimony. Perfect testimonies cannot be expected from persons with imperfect
senses. In the court's discretion, therefore, the testimony of a witness can be believed as to some facts
but disbelieved with respect to the others. 34
We sustain the appellate and trial courts' findings that the witnesses' testimonies corroborate each
other on all important and relevant details of the principal occurrence. Their positive identification of
all petitioners jibe with each other and their narration of the events are supported by the medical and
documentary evidence on record.
Dr. Roberto Garcia, the medico-legal officer of the National Bureau of Investigation, testified that the
victim had various wounds on his body which could have been inflicted by pressure from more than
one hard object. 35 The contusions and abrasions found could have been caused by punches, kicks and
blows from rough stones. 36 The fatal injury of intracranial hemorrhage was a result of fractures in
Salcedo's skull which may have been caused by contact with a hard and blunt object such as fistblows,
kicks and a blunt wooden instrument. 37
Appellants do not deny that Salcedo was mauled, kicked and punched. Sumilang in fact testified that
Salcedo was pummeled by his assailants with stones in their hands. 38
Appellants also contend that although the appellate court correctly disregarded Exhibits "D," "G," and
"P," it erroneously gave evidentiary weight to Exhibits "O," "V," "V-1" to "V-48," "W," "W-1" to "W13." 39 Exhibit "O" is the Joint Affidavit of Pat. Flores and Pat. Bautista, the police intelligence-operatives
who witnessed the rally and subsequent dispersal operation. Pat. Flores properly identified Exhibit "O" as
his sworn statement and in fact gave testimony corroborating the contents thereof. 40 Besides, the Joint
Affidavit merely reiterates what the other prosecution witnesses testified to. Identification by Pat. Bautista
is a surplusage. If appellants wanted to impeach the said affidavit, they should have placed Pat. Flores on
the witness stand.
Exhibits "V," "V-1" to "V-48" are photographs taken of the victim as he was being mauled at the
Luneta starting from a grassy portion to the pavement at the Rizal Monument and along Roxas
Boulevard, 41 as he was being chased by his assailants 42 and as he sat pleading with his
assailants. 43 Exhibits "W", "W-1" to "W-13" are photographs of Salcedo and the mauling published in local
newspapers and magazines such as the Philippine Star, 44 Mr. and Ms. Magazine, 45 Philippine Daily
Inquirer, 46 and the Malaya. 47 The admissibility of these photographs is being questioned by appellants for
lack of proper identification by the person or persons who took the same.
The rule in this jurisdiction is that photographs, when presented in evidence, must be identified by
the photographer as to its production and testified as to the circumstances under which they were
produced. 48 The value of this kind of evidence lies in its being a correct representation or reproduction of
the original, 49 and its admissibility is determined by its accuracy in portraying the scene at the time of the
crime. 50 The photographer, however, is not the only witness who can identify the pictures he has
taken. 51 The correctness of the photograph as a faithful representation of the object portrayed can
be proved prima facie, either by the testimony of the person who made it or by other competent
witnesses, after which the court can admit it subject to impeachment as to its accuracy. 52 Photographs,
therefore, can be identified by the photographer or by any other competent witness who can testify to its
exactness and accuracy. 53
This court notes that when the prosecution offered the photographs as part of its evidence,
appellants, through counsel Atty. Alfredo Lazaro, Jr. objected to their admissibility for lack of proper
identification. 54 However, when the accused presented their evidence, Atty. Winlove Dumayas, counsel
for accused Joselito Tamayo and Gerry Neri used Exhibits "V", "V-1" to "V-48" to prove that his clients
were not in any of the pictures and therefore could not have participated in the mauling of the
victim. 55 The photographs were adopted by appellant Joselito Tamayo and accused Gerry Neri as part of
the defense exhibits. And at this hearing, Atty. Dumayas represented all the other accused per
understanding with their respective counsels, including Atty. Lazaro, who were absent. At subsequent
hearings, the prosecution used the photographs to cross-examine all the accused who took the witness
stand. 56 No objection was made by counsel for any of the accused, not until Atty. Lazaro appeared at the
third hearing and interposed a continuing objection to their admissibility.57
The objection of Atty. Lazaro to the admissibility of the photographs is anchored on the fact that the
person who took the same was not presented to identify them. We rule that the use of these
photographs by some of the accused to show their alleged non-participation in the crime is an
admission of the exactness and accuracy thereof. That the photographs are faithful representations
of the mauling incident was affirmed when appellants Richard de los Santos, Nilo Pacadar and Joel
Tan identified themselves therein and gave reasons for their presence thereat. 58
An analysis of the photographs vis-a-vis the accused's testimonies reveal that only three of the
appellants, namely, Richard de los Santos, Nilo Pacadar and Joel Tan could be readily seen in
various belligerent poses lunging or hovering behind or over the victim. 59 Appellant Romeo Sison
appears only once and he, although afflicted with hernia is shown merely running after the
victim. 60Appellant Joselito Tamayo was not identified in any of the pictures. The absence of the two
appellants in the photographs does not exculpate them. The photographs did not capture the entire
sequence of the killing of Salcedo but only segments thereof. While the pictures did not record Sison and
Tamayo hitting Salcedo, they were unequivocally identified by Sumilang and
Banculo 61Appellants' denials and alibis cannot overcome their eyeball identification.
Appellants claim that the lower courts erred in finding the existence of conspiracy among the
principal accused and in convicting them of murder qualified by abuse of superior strength, not death
in tumultuous affray.
Death in a tumultuous affray is defined in Article 251 of the Revised Penal code as follows:
Art. 251. Death caused in a tumultuous affray. When, while several persons, not
composing groups organized for the common purpose of assaulting and attacking
each other reciprocally, quarrel and assault each other in a confused and tumultuous
manner, and in the course of the affray someone is killed, and it cannot be
ascertained who actually killed the deceased, but the person or persons who inflicted
serious physical injuries can be identified, such person or persons shall be punished
by prison mayor.
If it cannot be determined who inflicted the serious physical injuries on the deceased,
the penalty ofprision correccional in its medium and maximum periods shall be
imposed upon all those who shall have used violence upon the person of the victim.
For this article to apply, it must be established that: (1) there be several persons; (2) that they
did not compose groups organized for the common purpose of assaulting and attacking each
other reciprocally; (3) these several persons quarrelled and assaulted one another in a
confused and tumultuous manner; (4) someone was killed in the course of the affray; (5) it
cannot be ascertained who actually killed the deceased; and (6) that the person or persons
who inflicted serious physical injuries or who used violence can be identified. 62
A tumultuous affray takes place when a quarrel occurs between several persons and they engage in
a confused and tumultuous affray, in the course of which some person is killed or wounded and the
author thereof cannot be ascertained. 63
The quarrel in the instant case, if it can be called a quarrel, was between one distinct group and one
individual. Confusion may have occurred because of the police dispersal of the rallyists, but this
confusion subsided eventually after the loyalists fled to Maria Orosa Street. It was only a while later
after said dispersal that one distinct group identified as loyalists picked on one defenseless individual
and attacked him repeatedly, taking turns in inflicting punches, kicks and blows on him. There was
no confusion and tumultuous quarrel or affray, nor was there a reciprocal aggression at this stage of
the incident. 64
As the lower courts found, the victim's assailants were numerous by as much as fifty in number 65 and
were armed with stones with which they hit the victim. They took advantage of their superior strength and
excessive force and frustrated any attempt by Salcedo to escape and free himself. They followed Salcedo
from the Chinese Garden to the Rizal Monument several meters away and hit him mercilessly even when
he was already fallen on the ground. There was a time when Salcedo was able to get up, prop himself
against the pavement and wipe off the blood from his face. But his attackers continued to pursue him
relentlessly. Salcedo could not defend himself nor could he find means to defend himself. Sumilang tried
to save him from his assailants but they continued beating him, hitting Sumilang in the process. Salcedo
pleaded for mercy but they ignored his pleas until he finally lost consciousness. The deliberate and
prolonged use of superior strength on a defenseless victim qualifies the killing to murder.
Treachery as a qualifying circumstance cannot be appreciated in the instant case. There is no proof
that the attack on Salcedo was deliberately and consciously chosen to ensure the assailants' safety
from any defense the victim could have made. True, the attack on Salcedo was sudden and
unexpected but it was apparently because of the fact that he was wearing a yellow t-shirt or because
he allegedly flashed the "Laban" sign against the rallyists, taunting them into mauling him. As the
appellate court well found, Salcedo had the opportunity to sense the temper of the rallyists and run
away from them but he, unfortunately, was overtaken by them. The essence of treachery is the
sudden and unexpected attack without the slightest provocation on the part of the person being
attacked. 66
The qualifying circumstance of evident premeditation was alleged in the information against Joselito
Tamayo. Evident premeditation cannot be appreciated in this case because the attack against
Salcedo was sudden and spontaneous, spurred by the raging animosity against the so-called
"Coryistas." It was not preceded by cool thought and reflection.
We find however the existence of a conspiracy among appellants. At the time they were committing
the crime, their actions impliedly showed a unity of purpose among them, a concerted effort to bring
about the death of Salcedo. Where a conspiracy existed and is proved, a showing as to who among
the conspirators inflicted the fatal wound is not required to sustain a conviction. 67 Each of the
conspirators is liable for all acts of the others regardless of the intent and character of their participation,
because the act of one is the act of all. 68
The trial court awarded the heirs of Salcedo P74,000.00 as actual damages, P30,000.00 as moral
and exemplary damages, and one half of the costs of the suit. At the time he died on July 27, 1986,
Salcedo was twenty three years old and was set to leave on August 4, 1986 for employment in Saudi
Arabia. 69 The reckless disregard for such a young person's life and the anguish wrought on his widow
and three small children, 70 warrant an increase in moral damages from P30,000.00 to P100,000.00. The
indemnity of P50,000.00 must also be awarded for the death of the victim. 71
IN VIEW WHEREOF, the decision appealed from is hereby affirmed and modified as follows:
1. Accused-appellants Romeo Sison, Nilo Pacadar, Joel Tan and Richard de los
Santos are found GUILTY beyond reasonable doubt of Murder without any
aggravating or mitigating circumstance and are each hereby sentenced to suffer the
penalty of reclusion perpetua;
2. Accused-appellant Joselito Tamayo is found GUILTY beyond reasonable doubt of
the crime of Homicide with the generic aggravating circumstance of abuse of
superior strength and, as a consequence, he is sentenced to an indeterminate
penalty of TWELVE (12) YEARS of prision mayoras minimum to TWENTY (20)

YEARS of reclusion temporal as maximum;
3. All accused-appellants are hereby ordered to pay jointly and severally the heirs of
Stephen Salcedo the following amounts:
(a) P74,000.00 as actual damages;
(b) P100,000.00 as moral damages; and
(c) P50,000.00 as indemnity for the death of the victim.
Costs against accused-appellants.
SO ORDERED.
Narvasa, C.J., Regalado and Mendoza, JJ., concur.
Francisco, J., is on leave.
Footnotes
1 TSN of April 20, 1988, pp. 7-10.
2 TSN of April 13, 1988, pp. 22-23.
3 Exhibits "NN" and "SS;" Records, pp. 295, 296-A.
4 Exhibit "LL;" Records, p. 298.
5 Exhibits "OO" and "PP;" Records, pp. 296-A, 297.
6 Exhibit "E;" Records, p. 254.
7 TSN of December 1, 1987, pp. 17-39.
8 Exhibit "QQ;" Records, p. 302.
9 Exhibit "X-5;" Records, p. 329.
10 Exhibit "B;" Records, p. 249.
11 Exhibit "4;" Records, p. 319.
12 TSN of September 26, 1988, pp. 5-6.
13 Id., p. 15.
14 Id., pp. 83, 90.
15 TSN of Oct. 3, 1988, pp. 33, 53.
16 Id., pp. 40, 47-48; Exhibit "2;" Records, p, 227.
17 TSN of November 9, 1988, p. 25.
18 Id., pp. 25-27.
19 TSN of November 14, 1988, pp. 5-7.
20 Id., pp. 7-8; Records, pp. 297, 299.
21 TSN of November 14, 1988, pp. 10-11.
22 Records, pp. 426-428; Decision, pp. 59-61.
23 CA-G.R. CR Nos. 10501-10502, 10130-10131.
24 Rollo, G.R. Nos. 114931-33, pp. 654-655; Decision, Court of Appeals pp.
48-49.
25 Rollo, G.R. Nos. 114931-33, pp. 15-16; Petition, pp. 5-6.
26 Rollo, G.R. Nos. 108280-83, p. 207; Additional Brief for Appellants, p. 2.
27 TSN of April 13, 1988, pp. 32-33.
28 Rollo, G.R. Nos. 108280-83, pp. 44, 67, 77; Petition, pp. 34, 57, 67.
29 Exhibit "I," Records, p. 258.
30 TSN of March 7, 1988, pp. 50-51, 77-78.
31 Exhibits "L," "M," and "N;" Records, pp. 262-265.
32 TSN of December 1, 1987, p. 70; TSN of March 14, 1988, pp. 9, 29-30.
33 TSN of April 13, 1988, pp. 32-33.
34 People v. Caneja, 235 SCRA 328 [1994]; Lagunsad v. Court of Appeals,
229 SCRA 596 [1994]; People v. Dulay, 217 SCRA 103 [1993].
35 TSN of February 13, 1987, pp. 55-56.

36 Id., pp. 48-49.
37 Id., pp. 42-44.
38 Exhibit "I; Records, p. 258.
39 Rollo, G.R. Nos. 108280-83, pp. 220-221; Additional Brief for Appellants,
pp. 15-16.
40 TSN of April 20, 1988, pp. 4-15; Exhibit "O;" Records, pp. 276-278.
41 Exhibits "V," "V-1" to "V-23;" Records, pp. 292-301.
42 Exhibit "V-25;" Records, p. 302.
43 Exhibits "V-24," "V-26," and "V-28;" Records, pp. 302-304.
44 Exhibits "W" and "W-6;" Records, pp. 313 and 319.
45 Exhibit "W-2;" Records, pp. 314-315.
46 Exhibit "W-1;" Records, p. 316.
48 City of Manila v. Cabangis, 10 Phil. 151 [1908]; 4 Martin, Revised Rules
on Evidence, 61 [1989].
49 The Chamberlayne Trial Evidence, p. 617 cited in 4 Martin, supra; Tan v.
Sun Insurance, 51 Phil. 212 [1927].
50 1 Underhill, A Treatise on the Law on Criminal Evidence, 216-217 [1956].
51 Underhill, supra; VII Francisco, The Revised Rules of Court in the
Philippines, part 1, 107 [1973].
52 Francisco, supra.
53 City of Manila v. Cabangis, supra; cf. Vda. de Ramos v. Court of Appeals,
81 SCRA 393 [1978].
54 TSN of July 29, 1988, p. 33.
55 TSN of September 26, 1988, pp. 2-3, 5-6.
56 Id., pp. 114-123; TSN of November 9, 1988, pp. 42-50.

57 TSN of November 9, 1988, p. 35.
58 Id., pp. 38-50; TSN of November 14, 1988, pp. 6-10, 10-13.
59 Exhibits "V-1," "V-2," "V-8," "V-9," "V-12," "V-13," "V-15" to "V-18."
61 Exhibits "E" and "L," "K" and "F;" Records, pp. 254 and 262, 255 and 260;
TSN of April 13, 1988, pp. 25-26; TSN of December 1, 1987, pp. 23-26.
62 II Reyes, Revised Penal Code, 436 [1993].
63 United States v. Tandoc, 40 Phil. 954, 957 [1920].
64 People v. Ribadajo, 142 SCRA 637 [1986].
65 Exhibit "E," Records, p. 253.
66 People v. Abapo, 239 SCRA 469 [1994]; People v. Buela, 227 SCRA 534
[1993]; People v. Alcantara, 206 SCRA 662 [1992].
67 People v. Galit, 230 SCRA 486 [1994]; People v. Pandiano, 232 SCRA
619 [1994].
68 People v. Timple, 237 SCRA 52 [1994]; People v. Labre, 239 SCRA 159
[1994]; People v. Magalang, 217 SCRA 571 [1993].
69 TSN of June 25, 1987, pp. 12-15.
70 TSN of June 25, 1987, pp. 10-13.
71 Civil Code, Article 2206; People v. Dasig, 221 SCRA 550 [1993].

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G.R. No. 177404

G.R. No. 178097

Before Us are two consolidated Petitions for Review on Certiorari under

Subsequently, PCC executed a deed of assignment transferring all its rights as

Being the government agency primarily charged with the implementation of

While the determination of just compensation is essentially a judicial

WHEREFORE, x x x. The trial judge is directed to observe strictly the

Again, in Land Bank of the Philippines v. Celada,[44] we stressed that the

Capitalized Net Income: Cassava

16,666.67 x 0.90 = 15,000.00

per Tax Declaration:

8,963.78 x 0.10 = 896.38

Computed Value per

Cassava 15,896.38; Corn/Coco 24,919.92

The above computation was explained by Antero M. Gablines, Chief of

In accordance with Administrative Order No. 5, series of 1998,

In that Administrative Order No. 5, if the owner of the land is

In this recommended amount which you approved, how did you

80 % for what crops?

The cassava is P15,896.38.

How about the corn x x x intercropped with coconuts?

Under the circumstances, we find the explanation and computation of

In Apo Fruits Corporation v. Court of Appeals,[46] we once more gave

Whenever the cost of operations could not be obtained or not be obtained

LRI = Lease Rental Income per Hectare/Year as stipulated

P37,677.37 per ha.

P 6,882.05 per ha.

Following the formula: LV = CNI x 0.9 (P45,213.12 x 0.9) P40,691.81 +

We find the foregoing exhaustive explanation and thorough computations of

In expropriation cases, interest is due the landowner if there was delay in

responsibility and authority in the valuation and compensation of covered

PRESBITERO J. VELASCO, JR.

ANTONIO EDUARDO B. NACHURA

G.R. No. 171674

Before this Court is a Petition for Review

The facts of the case:

Respondent Carmen S. Tongson is the owner of four parcels

Sometime in 1988, the petitioner Department of Agrarian

In 1989, upon her return to Davao, respondent was

Respondent alleged that petitioner summarily took her

Petitioner denied the allegations and averred that the

On October 25, 1993, respondent filed a Petition[11] for

Agrarian Court (SAC), Branch 15, of the Regional Trial Court of

During the trial, the SAC formed a Board of Commissioners

On March 17, 1999, after due deliberation and on the basis

WHEREFORE, judgment is hereby rendered ordering the

Twenty-five thousand pesos per hectare for the thirty hectares in

Forty thousand pesos per hectare for the twenty hectares in

Petitioner then appealed to the CA via Rule 41 of the Rules

On August 30, 2005, the CA rendered a Decision, the

WHEREFORE, in view of the foregoing, the appeal is hereby

Petitioner filed a Motion for Reconsideration, [21] which was

Hence, herein appeal, with petitioner raising a lone

THE TRIAL COURT ERRED WHEN IT CONSIDERED

The petition is bereft of merit.

Petitioner is adamant that for purposes of computation of

The pertinent portions of PD 27 read:

Implementing the formula under PD 27, EO 228 states:

On the other hand, respondent contends that RA 6657

land shall be considered as additional factors to determine its